Investors are beginning to experience a “real challenge” in the face of current geopolitical tensions, largely due to North Korea’s provocations, according to Sheila Patel, CEO of International Goldman Sachs Asset Management.
But while risk management is becoming a key talking point among wealth managers globally, it’s not possible to just apply a general formula when controlling for uncertainty, Patel told CNBC following Pyongyang’s missile launch over Japan on Friday.
“The real question is, what is your starting point asset allocation?” she said.
If investors were not in the equity markets early, “maybe being a bit behind isn’t such a bad thing. And don’t rush,” Patel said, noting the U.S. market’s strong and prolonged rally.
“For those who are fully allocated, the answer is probably to raise a bit of cash, or look at some hedges,” she said.