So what should investors do to prepare? In order to insulate portfolios amid more volatility, I advocate:
1. Seeking international diversification. International stocks’ cheaper valuations already reflect some fair degree of risk.
2. Considering an overweight to energy companies, which can potentially act as a hedge against Middle-East induced market volatility.
Russ Koesterich, CFA, is the Chief Investment Strategist for BlackRock.
