Two strategies that could trap investors in losing trades right now (via CNBCFuturesNow)
Wilmington Trust's Meghan Shue warns snap decisions during market volatility spikes will trap investors in losing trades.
According to the firm's senior investment strategist, reacting to every U.S.-China trade war development and taking on large positions are two of the worst things they can do right now. "For long-term investors, to chase those headlines risk missing out on say very good days, maybe locking in some losses on the bad days and eroding your portfolio value — particularly after taxes," she told CNBC's ""The other thing that we would caution against is taking large bets in a portfolio," she added.to investing since May. After being overweight on stocks for years, she decided the fallout from the ongoing trade tensions was too risky.
"We are long-term investors. So, we reduced risk back in May when it became clear we were further away from a deal than we had originally thought," said Shue. She's now overweight cash and diligently searching for opportunities within sectors that could benefit from the government's protectionist policies. Some examples include defense contractors and software.
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