Strengthen your core

21 August 2026, 09:35 UTC Chief Investment Office GWM Investment Research

Strategic: Strengthen your core Strengthen your core Author: Sagar Khandelwal, Strategist, UBS Switzerland AG

Why? 1) Building a core portfolio allows investors to navigate different market scenarios with confidence, rather than depending on one path for growth and rates. 2) A portfolio broadly diversified across and within asset classes, geographies, and sectors can consistently grow wealth, providing compounded returns. 3) This approach helps maximize the chance of meeting financial goals, allowing investors to pursue other interests or tactical opportunities with greater confidence and avoid locking in losses in downturns. Source: Robert Clark_Unsplash

First-time and seasoned investors alike may be finding it economies. Up to 30% can go to growth themes like hard to navigate today’s financial markets. AI, Power and resources, and Longevity. Fixed income— such as government and corporate bonds—can make up On the one hand, stronger-than-expected corporate 15-50% of assets. Aim for a mix that matches currency earnings, especially in the US, Europe, and parts of the AI needs. Alternatives like hedge funds, private markets, and value chain, are buoying equity markets. At the same time, infrastructure can add more diversification and help manage shifting expectations about the US jobs market, inflation, risk. and the Federal Reserve’s interest rate path have injected volatility into assets like government bonds, the US dollar, Second, rebalance. Big market moves can shift and gold. And with elevated tensions remaining in the portfolios away from targets. Rebalancing means trimming Middle East amid the US-Iran conflict, a cloudy outlook for outperformers and adding to underperformers. This can oil and refined product prices is also adding to uncertainty. help lock in gains, control risk, and keep investors on track. Professional managers do this regularly, and individual CIO believes this market environment favors investing investors can benefit from the same discipline—especially in rather than sitting on the sidelines. Looking ahead, we volatile times. maintain a constructive view on markets, and expect global equities to rise by end-2026 but with periodic bouts For investors holding concentrated stock positions, now of volatility, as investors digest economic, technological, may be an opportune time to review how such positions and geopolitical developments. And high-quality align with financial plans and make a plan to reallocate government bond yields should fall as growth and inflation in a disciplined way. Approaches can include setting decelerate. mental rules to reduce positions when certain performance thresholds are met or at regular intervals. It may be But with uncertainty favoring flexibility and a need to think worth looking at structured strategies that allow investors in terms of market scenarios, we believe it is important gradually to decumulate stocks, reducing emotional biases to focus on three, key principles to build more robust and executing sales in a systematic way. Investors can portfolios for the remainder of 2026 and beyond: then identity gaps in their asset class, regional, and sector allocations and reinvest proceeds into fresh sources of First, maintain a balanced portfolio. A solid core is key potential yield, growth, or portfolio protection. for long-term success. CIO likes putting 30-70% of assets in stocks, with at least half in US shares and at least Third, look for ways to protect and grow wealth. Managing 20% in global markets, including Europe and emerging risk is as important as choosing the right assets.

This report has been prepared by UBS Switzerland AG. Please see important disclaimers and disclosures at the end of the document.

The cautious can reduce some stock exposure and add capital preservation strategies or gold, which has historically been a good long-term hedge. The income seeker can complement a core allocation to high-quality government and investment grade bonds with satellite investments in diversified fixed income approaches, high yield debt, emerging market bonds, equity income strategies, or…