Investing during turbulent times can feel frightening. But keeping large sums in cash can be scary for your long-term returns.
The list of worries on investors’ minds is long. The S&P 500 is hovering near all-time highs, fear of inflation and rising interest rates are roiling the US Treasury securities market and stories of rogue artificial-intelligence agents dominate the news. Then there are tit-for-tat tariff disputes and the deadly wars playing out in Iran and Ukraine.
It’s a lot. But investors can find good opportunities for a $100,000 stake, say strategists and wealth managers interviewed by Bloomberg. One expert focused on corporate and municipal bonds, while another pointed to AI’s impact on the healthcare industry. A third pointed to a way savers could hedge against the chance of higher income-tax rates later in life.
When asked how they would treat themselves with a $100,000 windfall, the experts daydreamed about a personal chef, a woodsy vacation home to bring extended family together and helping a non-elite sports team reach the next level.
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Managing Risk
How to Play It
We are amidst the greatest four-year bull run in S&P 500 history. Stocks have created over $8 trillion in global wealth just this year. In terms of asset allocation, anything other than full risk-on positioning has been left behind. While nearly every stock in the world has been embraced by investors (particularly in lower-quality, non-profitable segments), bonds have mostly been unloved. This is not an easy time to be a risk-conscious investor, but we are looking for intra-market calls that can help investors participate and manage risk.
One area where we are finding value is high-quality bonds. Amidst the volatility in rates, the yield on the aggregate bond index is now within striking distance of a 20-year high. Two of our favorite areas — investment-grade corporates and mortgage-backed securities — are yielding between 5% and 6%. We also like municipal bonds, which are high-quality and sport remarkably attractive yields on a tax-equivalent basis. Our view is that rates fall into next year as economic growth peaks, disinflation sets in and the labor market softens. Yield will eventually be destiny and we want to take advantage of the income available today. Bonds can feel like your worst enemy before they are your best friend.
Within equities, we prefer US quality value stocks. There have been big changes to sector composition across global indices, with technology stocks becoming ubiquitous in nearly every index. Nearly 20% of the Russell 1000 Value Index, for example, is comprised of tech stocks. While we remain overweight the sector due to superior earnings power and quality, we are searching for other drivers of return.
Healthcare is climbing up our list. The earnings estimates are beatable, it’s not an AI trade and it offers quality at a reasonable price. Another favorite area is utilities. They offer attractive dividend yields (particularly outside the US), remain inexpensive relative to broader equity markets and carry significantly lower beta, meaning they don’t move in lockstep with the broad stock market.
TREAT YOURSELF
I would hire a private chef for a year. I absolutely love to be in the kitchen creating something delicious, especially because it brings my busy family together, even if for only a few minutes. Unfortunately, I often don’t have the time. A private chef would be an incredible luxury while I’m at home — and would give me peace of mind that my family isn’t just eating pizza when I’m traveling for work. —Emily Roland
Investing in Taxes
How To Play It
I believe that one of the best ways an investor could spend $100,000 right now is on their federal tax bill. What I mean is that I’m of the view that US federal income tax rates have gone up and US state-level income tax rates are all but certain to increase over the long term. I also believe that local income taxes in major cities will rise. The last couple of years of the Trump administration may be the best time to convert traditional pre-tax IRAs into after-tax Roth IRAs. There just may not be a better time for decades to eat the tax bill on recognizing that income today. It’s sort of investing in yourself and your retirement — you will have to pay those taxes sooner or later. You can pay now or pay later when you have lower income — but if marginal rates go up at every single level, the logic of waiting to pay the taxes in the future doesn’t hold.
In 2025, the US federal budget deficit was a staggering $1.78 trillion. Legislators on the left and right are both offenders in being drunk on fiscal stimulus. I think incoming presidents have become hooked on the idea that when they arrive, they must have a massive fiscal stimulus package. When you take this as a recurring theme and string it out over many decades into the future, you have to expect federal marginal tax rates to only go higher. They certainly have been higher in the past — in the 1950s, the peak marginal federal tax rate was actually over 90%.
Some states are also experiencing yawning budget deficits and changing their state and local income taxes and capital gains rates to go ever higher. I’d posit that converting seems reasonable, particularly if one lives in a state or municipality with significant budget deficits that portend a future need to increase tax revenues to maintain the essential functions of government. I wouldn’t recommend selling stocks when you convert a traditional IRA to a Roth IRA, but would transfer the shares “in kind” so moving the shares doesn’t bring its own transaction cost. Then just prepare for April 15, 2027, when all the taxes will be due on that newly realized income.
TREAT YOURSELF
I’m a sports enthusiast and the parent of a Division I college athlete. You’re seeing an explosion of new money and revenues and expenses coming at Division I colleges. You could participate in that and give $100,000 to your alma mater. But if I wanted to have some fun, I’d choose a program in a less competitive tier, like an FCS [Football Championship Subdivision] program or Division II or III schools, where $100,000 might adjust the trajectory — maybe a team could pick up a couple good players via additional scholarship or invest in facilities, nutritionists and equipment. I’d buy season tickets and go watch my dollars at work. You can avoid the spectacle, glitz and corporate dollars and try to return to what college athletics used to be about — fair competition and love of the game. —Todd Jablonski
AI Healthcare Plays
How To Play It
Most investors associate AI with semiconductors and data centers. I’m more interested in the next phase, where industries begin using AI to create tangible economic value and impact in the “real world.” Healthcare stands out because it is one of the larger and least efficient sectors in the economy, with significant administrative complexity and growing demand driven by aging populations.
While investors often focus on AI helping to discover the next breakthrough drug, I think the more important opportunity may be how AI can help companies avoid spending billions of research and development dollars pursuing therapies that ultimately fail. If AI can improve the success rate of R&D, even modestly, it could have a notable impact on industry economics. Whether it’s accelerating drug discovery, improving diagnostics or helping clinicians spend less time on paperwork, AI has the potential to improve both patient outcomes and productivity.
Healthcare could be a defensive growth play and that’s a nice area to be in. There’s an interesting combination of defensive demand characteristics and long-term growth potential. Also, if you think of all the investment and spending and the big uptick in AI from 2022 to 2024, healthcare didn’t really participate in that. It trailed the S&P 500 by some 50% at one juncture. At some point, healthcare could be a “reversion to the mean” play — we have already seen some selloff in AI stocks. We’ve seen some M&A come back to the healthcare space as well, although higher interest rates for longer could slow things down.
TREAT YOURSELF
I would like a family vacation home. I have kids, ages 10 and seven, and I’ve been thinking longer-term about where would they want to meet us in 20 years with their families. It could be a lake place, a mountain place, somewhere in the woods. My wife and I are both from the Midwest, so somewhere around there. It would be secluded and off the grid a bit — you’d have to drive there and couldn’t just hop in an Uber. It should be more of a journey and experience and seclusion, where you get quality family-and-friends time. —Brooks Friederich
Check out the other investment pieces from our last quarter: