“Momentum itself is a shape-shifter,” Shores said. “It’s re-positioned itself into those more defensive sectors, more defensive stocks, and it has since been able to kind of continue to capitalize on what’s now the growing trend in the market place.”
Looking Ahead
For next year, analysts are almost unanimously calling for a shift to quality -- seeking out companies with healthy balance sheets and cash flow.
Shores says investors should look to defensive strategies like seeking out quality and minimum volatility. Matthew Bartolini, the head of SPDR Americas research at State Street Global Advisors, advises looking for high quality stocks within the value trenches. USAA Asset Management has been shifting money into ETFs focused on higher quality names, according to Lance Humphrey, a money manager in the firm’s global multi-assets team.
“As people position into 2019, investors are getting more defensive, and defensive usually targets quality: quality of earnings, earnings sustainability, making sure you have positions that are solid in case there is more volatility,” said Omar Aguilar, the chief investment officer for equities at Charles Schwab Investment Management. “The theme for factors going into next year is definitely toward defensive.”
This article was provided by Bloomberg News.