Morgan Stanley's Kathleen Entwistle talks positioning your portfolio ahead of the new year

Core Viewpoint - The current market environment presents opportunities for strategic adjustments in investment portfolios, particularly in response to volatility and the performance of large-cap technology stocks [2][4]. Group 1: Market Strategy - The company is advising clients to take advantage of market volatility by adding investments during downturns and reducing exposure during upswings [2]. - There is a shift from an overweight position in large-cap technology stocks to a more equal-weighted approach, driven by recent performance issues and the desire for diversification [4]. - The focus is on identifying opportunities among the remaining 493 stocks in the S&P 500 that have not performed as well as the top seven stocks [3][4]. Group 2: Investment in Private Markets - The trend of companies staying private longer has led the company to encourage clients to invest in private markets to capture growth before IPOs [8]. - Investment opportunities include private infrastructure, which has evolved to include data centers and cell towers, reflecting current market demands [10]. - The company is positioning clients to access these private market opportunities, which are seen as lucrative areas for investment [9][10]. Group 3: Portfolio Allocation - The traditional 60/40 equity to fixed income allocation is being adjusted, with a potential reduction in equity exposure to around 55% and an increase in alternative investments [12]. - The company maintains a positive outlook on municipal bonds, anticipating strong performance in the first quarter of the following year [12]. - There is an ongoing conversation about incorporating cryptocurrency into portfolios, primarily through ETFs, as clients seek to understand and engage with this asset class [13][14].