Wilmington Trust’s Anthony Roth is bracing for a more contentious climate on Wall Street.
Roth warns that this summer’s wild market swings could heat up as the 2020 presidential election gets closer, and it’s not too early to start worrying about it.
“We definitely see some storm clouds on the horizon in the presence of the election,” the firm’s chief investment officer said Monday on CNBC’s “Trading Nation. “
Roth, who manages investments totaling $93 billion, expects election jitters to join U.S.-China trade war and global growth risks as a major contributor to market turbulence.
“We have an administration today that has been very pro-growth, very pro-business in regards to its regulatory and fiscal posture,” said Roth. He added that the Democratic presidential hopefuls are pushing policies that could be detrimental to market gains.
According to Roth, the risks will become more apparent when primary season begins next February.
“[The risks] will get priced in in advance,” he said. “That’s when the market is going to become increasingly sensitized here.”
Despite Roth’s warning to investors, he does not call himself as a bear. He turned neutral on stocks in May after five years of being overweight.
He’s still putting money to work, but he’s taking a very deliberate approach to investing.
“This is actually an environment where quality stocks — stocks with strong balance sheets, consistent earnings [and] consistent cash flow — tend to do well,” said Roth. “Those are going to help create shock absorbers.”
He also sees gold and Treasury securities as options to hedge volatility in long-term investor portfolios.
“We’re going to see a sideways market. But we’re going to see a lot of volatility,” Roth said.