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UBS Wealth Management financial advisor on the biggest headwinds facing the current market

Teresa Jacobsen, a financial advisor at UBS Private Wealth Management, joined The Final Round to discuss her outlook for the market and what she thinks are the biggest headwinds facing the market right now.

Video Transcript

MYLES UDLAND: All right, welcome back to "The Final Round" here on Yahoo Finance. Myles Udland with you in New York. Talk more about what's going on in the markets right now and what we're seeing in the wealth management space. We're joined now by Teresa Jacobson. She's a managing director with UBS Private Wealth Management. Teresa, thanks so much for joining the program today.

Let's just kind of start with the conversations you were having with your clients right now and what the last few months have been like as we've gotten through a very scary time in markets, perhaps the scariest that some folks have seen in their career. And we're now entering sort of an interesting phase with election concerns, the market's rallied quite a bit, and we still have, of course, 11 million people out of work here in the US.

TERESA JACOBSON: Well, certainly the last few days have really highlighted the complexities and uncertainties that investors have been dealing with for quite some time. And the impacts on the market are from three areas. Certainly one, the virus all of the associated difficulties with that, a vaccine, mixed data. Second is the election, both platforms for the Republican and the Democratic parties are very, very different.

And the third story is the Fed. But I think the Fed is really the more enduring story in all of this. We can't discount the impact that the Fed had. They were attributed with the sell-off that we had certainly on Wednesday when the Fed gave us little direction in terms of a dovish outlook. And certainly, a great deal more flexibility, which caused a lot of concern in the market.

And then after that, the Fed governors each gave some contrary views on what the chairman had given. So were telling investors to expect volatility certainly into the election, and perhaps after that. But more importantly, to watch the level of risk that they have in their portfolios and not be too extended. And perhaps use volatility as an opportunity for rebalancing their portfolios.

MYLES UDLAND: Now speaking, I guess, of that risk level, did it seem that folks wanted to take a risk on stance through the summer, as markets were repairing themselves and data were coming in better than expected? And so, is there maybe an overhang or slight imbalance relative to someone's default posture that they might be looking to reset during this time?

TERESA JACOBSON: Well, I think the important thing in managing portfolios, is throughout this, to watching the allocations, how portfolios are rebalanced, and watching the allocations as markets move. So that at no one time, the portfolio is overextended in any one way. But I would came by and large, investors are cautious. They're very cautious mostly about the election. Not so much the election, because it ultimately will be resolved. But it's the process that we have to go through to get it resolved. And that has made the wallet stand on the hip.

MYLES UDLAND: Yeah, it certainly seems that there's been a consensus view forming that there won't be a resolution on November 3, and so we'll enter some sort of uncertain period as we get through that month. But then I guess thinking about areas of the market right now that you like, and maybe that you like outside of some of these news type hurdles that we know we're going to have to deal with, but ultimately we'll be resolved over the short to medium term.

TERESA JACOBSON: Well, I think that whether we get a Democratic or a Republican win, it seems like infrastructure is going to be a big part of either party's platform. So we're recommending that investors look at the industrials and the basic materials, and perhaps watch the weighting in some of the growthier tech names.

Tech is still certainly important. The technology area is one that has given this market a great deal of growth. And we're in a low growth environment. And because we're in a low growth environment, areas that give us growth are that much more dear. So I think that is why tech has had such a, such a following for so long.

MYLES UDLAND: And then just thinking about kind of how conversations with your clients have gone in the last few months as we've gotten through the summer towards the school year, what kind of lifestyle changes, if any, have folks made in terms of where they're living, where they'd like to spend most of their time? Work from home has changed a lot of those types of dynamics. And everyone sort of went home in a panic back in March, but now we've had some time to think about what people do and don't want. Have those preferences may be changed, at least among your client base?

TERESA JACOBSON: Well, many clients have had to work from home. And initially, it was quite an adjustment. But they've gotten used to it. And I think more of them will either work from home permanently or work from home on a greater basis then than they have in the past. They're very comfortable with it. The technology is there. The ease of working at home is certainly a very positive thing for them. The fact that they don't commute is a real plus as well. And many clients are looking at moving their retirement up to an earlier date. I think this has taken a lot of, has taken a lot of starch out of people.

MYLES UDLAND: Yeah, it certainly makes you kind of re-evaluate what is important, what is not important, and where we've been spending all of our time and our energy. All right, Teresa Jacobson with UBS Private Wealth Management, thanks so much for joining the show today.