UBS’s Lovell Says Use Stock Volatility to Move Up in Portfolio Quality

(Bloomberg) -- The intense stock-market swings are giving investors the chance to snag good investments at reduced prices, according to UBS Global Wealth Management's Nadia Lovell.

“As we go through a volatile period, there's opportunity to move up the portfolio in quality, and that's really our message right now to clients,” the senior U.S. equity strategist at the firm, told Bloomberg Television's Surveillance Friday.

While concern about elevated inflation and policy tightening by the Federal Reserve has put stocks on a roller-coaster ride, the strategist said that “earnings will really drive the market higher. So when we look from that standpoint over the next six months or so, we think the market will grind higher. But there will continue to be bouts of volatility.”

The Cboe Volatility Index, or VIX, is up about 40% so far this year, while the S&P 500 is down about 6%. Some industrial companies are among those that offer a quality upgrade, according to Lovell.

“We haven't seen the flow-through yet of those price increases that industrial companies have taken,” she said. “Some areas of tech do have pricing power, of course,” Lovell noted, while advising investors to “shift away from those companies having some issues around user growth.”

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