Katerina Simonetti

Simonetti explicitly recommends increasing positioning in "financials" as part of a strategy to buy high-quality large-cap stocks during market corrections. She argues financials possess pricing power, allowing them to perform well even in an environment of high input prices and potentially softening demand. LONG because she identifies financials as a sector offering attractive buying opportunities with resilience. A deeper-than-expected economic slowdown leads to credit deterioration and reduces profitability for financial companies.

During market corrections, sectors like financials, industrials, healthcare, and energy present undervalued buying opportunities to add to portfolios opportunistically, as they offer more attractive valuations compared to fully valued areas.

The AI productivity story is a broad global economy story, so she believes global exposure matters while leaning on the U.S. and staying opportunistic across sectors rather than concentrating in one AI company.

Broadening in earnings supports rotating into sectors that have lagged, including healthcare, industrials, and materials, to capture the broadening rally and avoid overconcentration in mega-cap tech.

Broadening in earnings supports rotating into sectors that have lagged, including healthcare, industrials, and materials, to capture the broadening rally and avoid overconcentration in mega-cap tech.

"Valuations are extremely attractive on the international side... [we are] overweight emerging." While the US market is expensive, Emerging Markets offer a valuation discount. Simonetti distinguishes between "International" (Europe) and "Emerging." She avoids Europe due to the Ukraine conflict ("major conflict happening... might take some time"), making EM the preferred vehicle for non-US exposure. Overweight Emerging Markets. US Dollar strength; geopolitical instability in specific EM regions.

"Valuations are extremely attractive on the international side... [we are] overweight emerging." While the US market is expensive, Emerging Markets offer a valuation discount. Simonetti distinguishes between "International" (Europe) and "Emerging." She avoids Europe due to the Ukraine conflict ("major conflict happening... might take some time"), making EM the preferred vehicle for non-US exposure. Overweight Emerging Markets. US Dollar strength; geopolitical instability in specific EM regions.