As artificial intelligence (AI) valuations skyrocket, high-net-worth investors are hunting for defensive opportunities outside the booming tech sector.
While massive tech rallies have propelled chipmaker Micron Technology Inc. (NASDAQ:MU) into a $1 trillion company, Morgan Stanley Private Wealth Management is advising clients to pocket some profits and rotate into tangible commodities and inflation-resistant energy equities.
The Shift To Real Assets
Kathleen Entwistle, Managing Director and Private Wealth Advisor at Morgan Stanley, noted in a conversation with CNBC that investors are thrilled with the tech sector's performance, finding sustainable upside requires a tactical pivot.
“The market has been on a tear for sure,” Entwistle observed. Instead of over-allocating to expensive tech giants, she recommends capitalizing on inflation hedges.
“It’s time to consider adding some serious commodities and real assets into the portfolio,” she stated, identifying gold and silver as key safe havens.
Energy Stocks To ‘Hold Up’
Alongside precious metals, Morgan Stanley is strongly favoring energy infrastructure and large-scale energy equities like SLB NV (NYSE:SLB), formerly known as Schlumberger.
Entwistle emphasizes that these specific selections are structured to withstand macroeconomic pressures that usually hurt growth stocks. “Energy is going to hold up even in inflationary environments,” she explained. This shift is particularly timely given federal signals indicating interest rates could stay elevated or potentially tick higher.
Introducing Evergreen Alternatives
To achieve true diversification, Entwistle’s strategy targets non-tech trades and non-correlated alternative vehicles to safeguard capital.
The firm is actively introducing “evergreen alternatives” to client portfolios, prioritizing digital infrastructure, communication towers, and private credit over traditional long-duration bonds.
Rather than abandoning equities entirely, this modern asset allocation framework prepares wealthy investors for sudden market shifts, offering a stabilized entry point should a broader tech pullback occur.
Price Action Within Morgan Stanley’s Picks
Entwistle’s energy pick SLB has risen 51.07% year-to-date, 62.59% in the last six months, and 72.52% over the year. Its Benzinga Edge Stock Rankings reveal a strong price trend in the short, medium, and long term, with a solid growth score but a poor value score.
Meanwhile, at the last check, Gold Spot US Dollar fell 0.41% to hover around $4,489.12 per ounce. Its last record high stood at $5,595.46 per ounce. Gold EFTs like SPDR Gold Trust (NYSE:GLD) have risen by 4.46% YTD and 33.66% over the year. Meanwhile, gold miners-linked ETF like, VanEck Gold Miners ETF (NYSE:GDX) was up 1.91% YTD and 75.14% over the year.
Similarly, Silver Spot US Dollar was trading 2.16% lower at $75.3215 per ounce, at the last check. iShares Silver Trust (NYSE:SLV) was 107% higher YTD and 128.97% over the year. Additionally, silver miners-linked, Global X Silver Miners ETF (NYSE:SIL) was 6.81% and 114.09% higher YTD and over the year.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Image via Shutterstock
Login to comment