The market volatility may be leading retail investors astray.
According to Kathmere Capital Management’s Nick Ryder, they shouldn’t use the current backdrop as an excuse to dive into defensive trades — including dividend-paying stocks and bonds.
“Oftentimes, we just see too often people taking an income-focused approach, and it leaves a lot on the table,” the firm’s chief investment officer told CNBC’s “ETF Edge” this week. “We generally just advise for all of our clients to take a total return-oriented approach … that’s going to apply across stocks, bonds and everything in between within a portfolio.”
Ryder, whose firm has $3.5 billion in assets under management, warns against so-called “yield-chasing.”
“Within fixed income, it could be yield-chasing in terms of moving further out interest rate risk, taking greater amounts of duration and portfolio, [and] moving from investment grade to high-yield bonds —which have dramatically different risk and return expectations,” he added.
