A common question especially in Asset Management circles?
The unprecedented, extreme liquidity central banks have been pumping in the economy will go on for a while, which means you could have significant returns investing only in major stock indexes. Holding equities only isn’t a big problem as long as you can make it into a big umbrella with global, solid names.
I’m Brazilian and an emerging markets investor, so I’d weigh my portfolio a little more to Asian stocks ex-Japan through exchange-traded funds, followed by U.S. stock indexes, like the Nasdaq 100 and the Russell 200. There’s still a high degree of uncertainty in the coming months, we’re still in the brave new world of the pandemic, but I’m optimistic at some point we will have a reliable treatment for the virus and a vaccine, with prices as whole responding well to that.
It will take central banks a while before starting raising rates, so you’d have a perfect environment for growth. Even gold will react well to all the liquidity, so it would be another asset to carry.
Emerging markets as a whole tend to perform better in this scenario with Asia having better growth prospects than South America or Africa due to their political, educational and institutional issues.