Three experts weighed in.
Lisa Shalett, chief investment officer at Morgan Stanley Wealth Management, sees areas of opportunity in some unloved corners of the market.
"Our strategy has been to, you know, move away from the indexes which we think are excessively concentrated and super expensive -- you know, tech names that we all know -- and really if they want to play the market here to go after pockets of value and as areas that are still left behind from the February-March sell-off. So that would include areas like financials, like industrials, like small caps, like materials, like energy. And those are the areas that we're encouraging folks to be stock pickers, not ETF index buyers. Ultimately, the value names had their performance exacerbated by a sudden stock recession."
Chris Ailman, chief investment officer at the California State Teachers' Retirement System, is still sitting in cash for now.
"This market rally is nice to see but the bull market is over, and we're in a bear market and I think we're in a trading range. It's nice to see some of the other stocks do better [Tuesday] but this market has been highly concentrated in five names, the stay-at-home names, and we're far from out of the woods on this one. ... We still have a large cash position because in a recession, in a bear market, cash is important. The return on cash is terrible, the phrase cash is trash is true but in this environment cash is king. So we have been slowly getting a little offensive, but we think this recession is longer than what people are expecting. And so we're still being fairly defensive in our asset allocation. We'll end up shifting that a little bit, because of the private market assets, real estate is still pretty strong and hasn't gone down a lot in value yet. Private equity is an opportunity. We're not seeing the investment opportunities appear as much. People are really stretched on the debt side, and in this crisis, it seems like that's the best opportunities."
Alan Ruskin, chief international strategist at Deutsche Bank, said the recovery will be a long one.
"We're in fact thinking that we're only going to recover all the losses that we've incurred over the last quarter and ... still incurring by sometime in 2022. There's a long, long, long time part ahead in terms of recovery and the market I think anticipates that. So I think the tension you have is really about, firstly, how quickly can you recover. ... It's more 'can the central banks support markets and risky assets for a lengthy period of time?' That's I think the big question out there. I think the problems probably arise if you have some sort of second wave, and you have this period of optimism dashed. I think that that is when the equity market will be vulnerable again. But until then, you know, whilst we're still in this phase of opening, I think the equity market is kind of telling you that the S&P is going to have a hard time [getting] through 3,000, but it's made a pretty solid low earlier in March, and it's not going to break down until we see exactly what the path of the virus is."