Financial markets will also not be the same on the other side, according to Chris Hyzy, the chief investment officer of Merrill and Bank of America Private Bank, which collectively manage $2.7 trillion in assets. since the Great Depression and steep earnings declines are confirming their worst fears.He expects pent-up demand to be relieved soon afterwards during 2021 as life returns towards normal.
"A whole slew of new behaviors are going to be here for a really long period of time," Hyzy told Business Insider in an exclusive interview. "What does that do to consumer spending, corporate confidence, etc? That's the key question in what we call the new frontier." Pending the definitive answers to that question, Hyzy recommends three changes investors should make in order to thrive in the so-called new frontier.Prior to this crisis, the emphasis was on allocating to different asset classes based on one's investing goals. But moving forward, the nitty-gritty of each topline investment in a portfolio will be more crucial, according to Hyzy.
Within stocks, it will be extremely important to buy "iconic brands" that people trust and latch onto, Hyzy said. He added that companies that pay or grow their dividends and rely less on stock buybacks will be critical. This is simply because the bond market is not producing the kind of cashflows for investors that it once did.
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