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5 tips to adapt your portfolio to the coronavirus crisis

UNITED STATES (OBSERVATORY NEWS) — If you want to be successful in your investments then learning how to buy disney stock, or the stock of another successful company is always a good idea. But what other techniques can you use, especially in these uncertain times. In a note released Monday, analysts at UBS bank identified 5 ways for investors to emerge a winner from the coronavirus crisis.

The bank has indeed identified 5 investment themes, in order to make the right choices for your portfolio in the face of pandemic risk.

Emerging market stocks

Emerging market stocks have outperformed development markets in recent days, with the number of new daily cases in China continuing to slow as the virus spreads across Europe. Emerging market stocks outperformed the S&P 500 by 5.75% last week, the note said.

UBS analysts have said they are posting an overweight recommendation on emerging market stocks, particularly China, but are more cautious in the eurozone.

Buy oversold shares

“We highlight a number of areas that we believe have been oversold, including the consumer discretionary sector in the United States, where stocks have fallen 11% in the last five trading days despite solid housing data,” said Mark Haefele, the bank’s chief investment officer.

The UBS team has also favored the US communications services industry, which includes Disney, Netflix (NASDAQ: NFLX ), Twitter (NYSE: TWTR ) and Alphabet (NASDAQ: GOOGL ) which it believes is likely to be more defensive due to the fact that people are spending more time at home in the face of the spread of the virus.

Buy long-term winners

The virus epidemic will “accelerate” long-term secular trends, and UBS analysts have said they see a huge benefit for companies that focus on digital transformation.

“The COVID-19 epidemic has given additional impetus to remote working, and the use of online business models in China has increased significantly during the epidemic,” they said.

Prepare your wallet for the fight against the virus

Poorly diversified portfolios will face a “sleight of hand” in the coming weeks, analysts at the Swiss investment bank said.

“The crisis has shown the effectiveness of a mix of stocks, bonds and alternatives in a portfolio, with strong bond performance helping to cushion declines in stocks,” they said. Gold was also recommended by the team as a portfolio hedge.

Improve your return and take advantage of volatility

The 10-year US Treasury yield hit a new record of 1.03% on Monday, as major central banks announced plans to cut rates.

“In this context of low yield, investors will have to consider strategies that can improve this yield in portfolios, such as dividend paying stocks and European bonds in the crossroads between investment quality and high yield”, analysts said.

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