Diversification Remains Key Amid All-Time Highs

UBS maintains a positive outlook on US equities driven by AI and secular trends but recommends diversifying into bonds and other regions to manage geopolitical risk and high valuations.

Key Takeaways

• 1.Investors should rebalance concentrated portfolios toward broader sectors and geographies despite record highs in US equities.
• 2.UBS expects the Federal Reserve to resume easing toward the end of 2026 as core inflation and wage growth moderate.
• 3.The Trump-Xi summit outcomes are incrementally positive, including specific commitments for China to buy USD 17bn in US agricultural products annually.

Table of Contents

• From the studio
• Thought of the day
• What to watch: 18 May
• Diversify equity positions across sectors and geographies
• Consider bonds, alternatives, and commodities to enhance portfolio resilience
• Time in the market ultimately beats timing the market
• Caught our attention
• Market update
• Global asset class preferences definitions
• Appendix

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