Mona Mahajan, head of investment strategy and asset allocation at Edward Jones, has highlighted concerns about a potential disconnect in the market. This disconnect is between the earnings fundamentals of some artificial intelligence (AI) and AI-disrupted companies, and the actual sales and growth figures reported in their quarterly reports. According to Mahajan, the current market behaviour reflects a ‘sell first, ask questions later’ mentality.
Mahajan suggests that the next 12 to 24 months will be crucial in determining whether these fears materialize. Edward Jones believes that the market is currently front-running developments expected to unfold over the next three to five years. This anticipation may create opportunities in sectors that have been disproportionately affected by the sell-off.
For the time being, Edward Jones recommends focusing on large and mid-cap stocks. Within specific sectors, they favour industrials, emerging markets (EM), and international markets. These areas offer both earnings upside and diversification away from US large-cap software companies. The firm also expresses a preference for areas within investment-grade markets.
Edward Jones is a financial services firm that provides investment, retirement, and insurance solutions to individual investors. They manage investments and provide financial advice to help clients achieve their long-term financial goals.
