Investors should expect heightened market volatility in 2020. History tells us that it’s not uncommon for three to four large-cap equity stock market pullbacks of at least 5% to occur each year and market corrections of at least 10% can occur every year. As a result, it may be prudent for investors to position their stock portfolios away from higher-risk asset classes for safer asset classes.

Portfolio Guidance:

• Cash has an important place in a portfolio as a volatility dampener and a source of funds.
• Focus on higher quality assets.
• Go beyond traditional fixed income for yield. Investors may consider equity dividends as another source of income.
• Defense can be a good offense. Given expectations for market volatility, suggest reducing exposure to riskier assets.
• Focus on longer-term diversification, as shorter periods are likely to be more volatile