Solid Recovery Potential in US: Strategist

The recovery potential in the United States is greater on a short-term basis, said Stephen Davies, CEO at Javelin Wealth management, noting that U.S. stocks have outperformed Asia and emerging markets since the beginning of the year.

"We have been increasing our exposure to the U.S. market over the last six to nine months," Davies said on CNBC Asia Pacific's Protect Your Wealth.

"Don’t focus on reacting to short-term market moves, look at the core economic trends," he advised.

A 'Moderate Risk Portfolio'

For a typical 'moderate risk' portfolio, Davies suggests the following: 50-60 percent exposure to equity, 35 percent to fixed income, 5-10 percent to gold and commodities, and the remainder in cash.

There is no need to hold large amounts of cash, he said, because the underlying market fundamentals point to a solid economic recovery.

“If you look at corporate's actually all bubbling along very healthily underneath all the noise that we've got at the sovereign level.”

Hold Gold

Davies said he believes investors should hold gold as demand for the precious metal is rising in developing countries.

He added the precious metal is also a good hedge against inflation and any potential weakness in the U.S. dollar, especially with volatility creeping back in equity markets.

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Catch "Protect Your Wealth" on CNBC's Asia Pacific network every Tuesday on "CNBC's Cash Flow," Wednesday on "Asia Squawk Box" and Thursday on "Capital Connection."