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Here's how investors should position their portfolios if a 'blue wave' materializes, according to the world's largest asset manager

Here's how investors should position their portfolios if a 'blue wave' materializes, according to the world's largest asset manager


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The outcome of Tuesday's election will have wide ranging implications for investors' portfolios, BlackRock said in a note on Monday.



With polls suggesting a greater likelihood of a "blue wave" outcome, investors should move toward a more pro-risk stance despite last week's sell-off in stocks, according to BlackRock.



Large-cap tech stocks have fueled market gains this year, but BlackRock says investors should focus instead on smaller companies that are poised to grow.A 



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The world's largest money manager says investors would be wise to strategically re-position their portfolios ahead ofA  Tuesday's presidential election.A Specifically, investors should be open to more risk while diversifying out of mega-cap technology stocks in the event that the Democrats pull off an election sweep to control both houses of Congress as well as the White House, BlackRock strategists said in a note to clients Monday.A "A democratic sweep outcome in the election would tip us to a more pro-risk stance overall, strengthening our conviction that a cyclical upswing will benefit risk assets over a 6- to 12-month horizon," BlackRock wrote, citing "significant financial expansion" as the main catalyst.Accordingly, the firms suggests investors favor smaller sized companies and emerging market stocks instead of a larger stake in stocks that have fueled market growth this year, like large-cap technology companies: "A repeat is unlikely in 2021," BlackRock says of 2020.A 
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