Tony Pasquariello, head of hedge funds at Goldman Sachs, said stocks are "very good" but investors should be mindful of risks, including the US budget deficit and modest gains in equity prices.
The stock market has had a great year so far, driven primarily by stocks in AI-influenced companies. But some market participants are starting to worry.
Tony Pasquariello noted that the share price was good, but warned investors not to lose sight of the increasing risks. Goldman Sachs' global director of hedge or risk management fund clients mentioned the strong rise in stock prices.
A basket of "chosen weapons" large-cap tech stocks has risen 24 percent since the April sell-off, the tech-focused Nasdaq 100 is up 18 percent year-to-date and the S&P 500 is up about 34 percent from its lows in October.
“Despite all this earned power and momentum, my instincts tell me now is a good time to hit the brakes at least a little. More broadly, there are several threats to the bulls' direction," said Tony Pasquariello.
"Overall, it's a bull market, but the downside potential is increasing, so I'll be looking for places to reduce overall portfolio risk as we move into the next phase of the political game," he assured, and given the low cost of insurance, he suggested investors keep premium positions.
