Wilmington Trust's Meghan Shue is out with a contrarian playbook designed to help investors grab profits during volatility.
Even as correction forecasts increase and risk appetites slump on Wall Street, she lists overweighting stocks as her first recommendation for those with 9 to 12 month time horizons.
"Over that time frame, the economy is likely to perform at above trend rates — being supported by consumer savings, cap-ex and an inventory rebuild.," the firm's head of investment strategy told CNBC's "Trading Nation" on Friday. "So, we think stocks are well-positioned to outperform bonds."
Next, Shue emphasizes buying emerging market stocks. It includes one of the Street's most unpopular spots right now: China, which is getting hammered by new regulations targeting industries including big tech, crypto, and casinos. Plus, it's dealing with the fallout of Chinese property developer Evergrande's debt crisis.
"Risks are certainly elevated in China," said Shue. "Certainly, property weakness puts some downward pressure on the economy. But we think regulatory risks are at least somewhat priced in at this point. Chinese equities are down 30% since February."
Third, Shue, who oversees $141 billion in assets, believes investors should overweight cyclicals and temper their enthusiasm for technology stocks. Her top picks are financials, industrials, energy and materials.
"We're also overweight the international developed equities which have more of a cyclical bend to them and tend to benefit more from a global economic recovery," said Shue, a CNBC contributor.
Her base case is global re-openings interrupted by the Covid-19 Delta variant surge will resume in the fourth quarter, which kicks off this Friday.
Shue's fourth play is to broadly overweight commodities on the continued impact of solid demand, inventory rebuilding and inflation.
"That transitory inflation view is pretty much consensus," Shue said. "While we also think inflation pressures will subside as we move into 2022, we think there's some upside risk... So, we're putting this on as a hedge."