Cyberattacks against accounting software firm Wolters Kluwer and the City of Baltimore in May showed how the newest wave of malicious hacking can have significant, often...Technologyread more
The European parliamentary election is the second largest democratic exercise in the world.Europe Newsread more
Biden had criticized Kim Jong Un as a "dictator" and a "tyrant" at a recent rally in Philadelphia. North Korean state media responded by calling Biden a "fool of low IQ" among...Politicsread more
Buybacks have gotten a bad rap from both Republicans and Democrats. But stocks would be trading at a massive discount without them.Marketsread more
Microsoft shares have gained 133% since November 2015, outperforming a tech "basket of unicorns" over that stretch.Technologyread more
The president's state visit comes amid tensions with carmaker Toyota over potential auto tariffs. Trump has repeatedly threatened Japanese and European carmakers with tariffs.Traderead more
The IRS is about to release a new draft of Form W-4, which will more closely reflect the changes stemming from the Tax Cuts and Jobs Act. For workers, that means they'll need...Personal Financeread more
The Mega Millions jackpot has spilled over $400 million. It would be the ninth largest winning since the game began in 2002.Personal Financeread more
Trump was speaking at a meeting of Japanese business leaders in Tokyo during his state visit to Japan on Saturday.Marketsread more
The biggest U.S. gasoline price surge in years is running out of steam just in time for the start of the summer driving season.Energyread more
When commercial real estate investor Manny Khoshbin spent $2.2 million on the fastest production car in the world, he had no idea it would very quickly also become the...Autosread more
With the trade war causing market volatility and central banks on a mission to tighten monetary policies, wealth managers are calling for a shift in investing strategies.
Still, they predicted that investors will likely face lower returns ahead.
Rainer Michael Preiss, executive director at Taurus Wealth Advisors in Singapore, pointed to how the environment is changing: volatility is picking up, and interest rates are rising and central banks are tightening.
"So far, everybody has been conditioned to buy the dip. In all honesty, that was the right strategy for the last couple of years when we had quantitative easing. Now interest rates are rising, and we have so-called quantitative tightening," Preiss said.
Quantitative easing, which involves pumping money into the system, contributed to rising prices for stocks and bonds. Conversely, central banks' reversing that process — known as quantitative tightening — decreases liquidity in the market, weighing on prices in the process.
Preiss, who spoke to CNBC on Monday, said that tightening will likely lead to lower returns for stock market investors.
"The returns are becoming less and risks are rising ... The risk is rising with regards to the returns you potentially get from long-only equities," he said, referring to the common investment strategy of solely buying shares that are expected to increase in value.
Deutsche Bank Wealth Management said in a Aug. 7 report that central banks' attempt to normalize their monetary policy is likely to lead to "positive but rather lower returns in conventional asset classes (such as equities or corporate bonds) than the high levels investors have grown used to in the last few years."
"At the same time, a period of abnormally low market volatility appears to be coming to an end," the report added.
In times of volatility, a more hands-on approach to investing often leads to better returns, experts said. A so-called active investing strategy for stocks can outperform the overall market by taking advantage of short-term price fluctuations, they said. Passive investors, on the other hand, are in it for the long term, and limit the amount of buying and selling within their portfolios. They usually invest in assets that mirror the composition of major stock or bond indices.
"I think in this environment, it would be prudent to raise cash, but also secondly, try to reduce passive investment strategies, (exchange-traded funds), and also go into investments that are active, where you have some ability to also raise cash, also have the ability to look into non-index stocks, " Preiss said.
He added: "Our portfolio construction has shifted into more flexible mandates, unconstrained strategies that potentially can benefit from higher volatility. Because I think whatever everyone seems to agree upon is that ... volatility is rising."
Hedge funds, for instance, might be a good alternative in this environment because they tend to experience less volatile returns, suggested Deutsche Bank Wealth Management.