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Gridiron Action: 5 Ground Game Ideas For Investors

Christopher Dhanraj profile picture
Christopher Dhanraj

Recent market volatility has shaken confidence. Heading into year end, we identify 5 themes for investors to consider.

The sharp sell-offs in the equity market seen in recent weeks are a reminder that markets share parallels with American football. Both reward measured ground games rather than betting on long bombs. Successful investing requires patience, discipline, and keeping the end goal in mind, despite the occasional setback. The iShares Investment Strategy team discusses five investing ideas to help move the ball closer to the goal line as discussed in the latest Investment Directions.

1. Downfield: Looking past political gridlock in the U.S.

Our base case still sees strong U.S. growth underpinning the global expansion and U.S. earnings continuing to impress. But like a quarterback looking for an open receiver, opportunities can be difficult to find. However, the U.S. midterm elections produced divided government and likely political gridlock with few long-term market implications for now. Historically, that has at times been a positive for markets. At the very least, the divided government means a number of sectors are in focus, including defense, healthcare, and infrastructure.

2. Japan: Stuck at the line of scrimmage

In Japan, a weaker yen, solid corporate fundamentals, bargain valuations, a stable political environment and central bank buying support an investment case for the country. Indeed, Japanese equities are outperforming the global developed ex-U.S. equities benchmark - and are less expensive. But like a talented team that can't quite win games, we see no catalyst for a rally and remain neutral.

3. Seek defense in emerging markets

Sometimes the best offense is a good defense, it turns out. Take emerging market (EM) assets, which have continued to struggle as decelerating global growth, along with greater macro uncertainty, has tightened financial conditions. We're constructive on EM equities, but this year is a sober reminder of the risks of EM

This article was written by

Christopher Dhanraj profile picture
Chris Dhanraj is the Head of iShares Investment Strategy for the US ETF business. His team analyzes markets and macro trends to provide actionable market insights across asset classes using iShares ETFs. Prior to joining Blackrock, Mr. Dhanraj worked at Citigroup where he was the Head of North America Multi-Asset Investment Strategy for Citi Private Bank and a member of the Global Investment Committee. In this role, he helped set asset allocation and investment strategy for Private Clients and Family offices. Earlier, he also served as a Senior Strategist at Citigroup advising Institutional clients. Before joining Citigroup, Mr. Dhanraj covered Institutional clients in the Derivatives Sales and Trading team at BofA Merrill Lynch. Prior to this, he was the Head Trader at Traxis Partners, a multi-asset hedge fund founded by Morgan Stanley. Mr. Dhanraj began his career within the Emerging Markets Foreign Exchange trading division at Citigroup. Mr. Dhanraj holds a B.S. in Economics from the Wharton School and a B.A in International Studies from the University of Pennsylvania. He also earned an MBA from Columbia Business School.

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