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Is It Time to Protect Client Assets with the Earnings Certain Portfolio?

Posted: 08/08/2024

Slideshow

This week, Zacks Equity Strategist Mayur Thaker, CFA discusses:

โ€ข The macroeconomic signs that indicate it may be time to allocate into our defense-oriented Earnings Certain Portfolio (ECP). First, Mayur outlines the ECP investing thesis. The ECP family of portfolios include high-quality, recession-resistant companies that are durable, moat-protected, low volatility, with steady earnings growth. ECP members include Clorox (CLX), Novo Nordisk (NVO), J M Smucker (SJM), American Tower (AMT), to name just a few.

โ€ข Mayur then looks at data that suggests an increasingly high probability for a downturn or recession in the months ahead. From household employment to the unemployment rate, permanent job losers to job openings (JOLTS), as well as many other labor metrics, Mayur shows that while a recession isn’t a certainty, it is a growing probability.

โ€ข To wrap up this discussion, Mayur offers a plan of action to recession-proof your portfolio. He presents 4 indicators he is watching to know when it’s time to go defensive. The first 2 have already happened, but he recommends remaining long on risk assets for now. When the other 2 indicators are triggered, go full-blown defensive with the Zacks Earnings Portfolio. Don’t miss this important and timely analysis of our current volatile market.