The barbell strategy. It’s not a gym bro thing, but rather, it’s an increasingly common bit of investing advice from some of the market’s top strategists amid fears of an AI bubble.
It refers to an investing approach that involves investors splitting their portfolio largely between high- and low-risk assets. The idea is that one side of the portfolio can offer downside protection if the other underperforms, giving investors a way to cash in high-return, more speculative investments while hedging risk.
More strategists have been pushing the recommendation as they eye the risk of a stock bubble in the market’s highest-flying stocks.
The S&P 500 has hit record after record this year, and around half of the index’s gains over the past five years have been driven by growth stocks, according to an analysis from Citi.
In a recent note to clients, the bank pointed to the S&P 500’s historically high valuation and recommended a barbell portfolio split between growth and cyclical stocks.
Cramer spots opportunities in 2 overlooked stocks as markets drop
