Stocks Could Fall 10% — Here's The Pullback Playbook

• A 10-20% market pullback is still anticipated in the coming months, fueled by rising yields and geopolitical risks.
• Valuations are stretched, with the Shiller CAPE ratio at its second-highest level and the Buffett Indicator at its highest since 1980.
• Investors should diversify across and within asset classes, considering European equities, hedging strategies, and gold.
• Avoid overvalued US tech, especially hyperscalers, as their capital spending on AI infrastructure may not yield proportional returns, akin to the telecom bubble.
• Opportunities during a pullback include cybersecurity, manufacturing, industrials, and pharma/healthcare with attractive dividend yields.

Kristina Hooper, Chief Market Strategist at Man Group, reiterates her call for a 10-20% market pullback by year-end, driven by rising yields, stretched valuations, and geopolitical headwinds. She advises retail investors to be cautious, diversify their portfolios, and consider defensive sectors and alternatives, while avoiding overvalued tech stocks.