Top investor: Safe stocks for a crazy market

Published Wed, Sep 2 201510:21 AM EDT

Louis Navellier, the leader of CNBC's "Squawk Box" Platinum Portfolio competition with a gain of 19 percent this year, shared his views on how to ride out the volatility in the market. The S & P 500 staged its worst start to September in 13 years on Tuesday, dipping back into correction territory, down 10 percent from its 52-week high in May. The markets then rebounded early Wednesday with the Dow up more than 150 points. The CBOE Volatility Index shot above the 50-mark last week for the first time since the financial crisis in 2009. As investors brace for the possibility of more turbulence, the chairman of Navellier & Associates says two areas of the market can be used for shelter. Source: FactSet "The only decent sectors at this time are biotech and health care," said Navellier. He said both groups are projected to post the strongest revenue trends in the upcoming earnings season, compared with negative projections for the entire S & P 500. Navellier, who uses a quantitative approach to find stocks that have strong sales and positive earnings outlooks but moderate price multiples, says money will continue to migrate to these companies. He also expects consumer discretionary stocks to eventually join that list but said it's too early to say when. So far in 2015, consumer discretionary and health care stocks are leading the way, up 1 percent and 0.02 percent through Tuesday, compared with a loss of 7 percent for the S & P 500 over the period. Read More Goldman: Market rally likely ahead. What to buy Apart from those sectors, the money manager says that focusing on individual names has been a winning strategy this year. "Stock picking is working better than sector picking at my management company as my CNBC Platinum picks prove," he said. His top three picks for his model portfolio are Allergan , Gilead Sciences and CVS Health —all up at least 4 percent this year. Navellier maintains that the heightened volatility on Tuesday, with the Dow falling 470 points, is likely just one of many retests of the lows ahead of the Federal Reserve's next meeting. "I expect the market to stage a big recovery if the FOMC does not raise key interest rates on September 17," said Navellier, predicting that the volatility is likely to continue until then. He also attributes the increase in volatility to the potential mispricing of ETFs during chaotic times, as reported by The Wall Street Journal . Read More As stock market plummets, five places to hide In the near term, he said, "there's nowhere to hide," except for intermediate bonds and stocks with growing dividends. As CNBC Pro pointed out earlier this year, exchanged traded funds such as the iShares 20+ Year Treasury Bond ETF (TLT) and the iShares 7-10 Year Treasury Bond ETF (IEF) perform well when the stock market has a sudden drop.

Louis Navellier of Navellier & Associates

Adam Jeffery | CNBC

Louis Navellier, the leader of CNBC's "Squawk Box" Platinum Portfolio competition with a gain of 19 percent this year, shared his views on how to ride out the volatility in the market.

The staged its worst start to September in 13 years on Tuesday, dipping back into correction territory, down 10 percent from its 52-week high in May. The markets then rebounded early Wednesday with the Dow up more than 150 points.

The CBOE Volatility Index shot above the 50-mark last week for the first time since the financial crisis in 2009.

As investors brace for the possibility of more turbulence, the chairman of Navellier & Associates says two areas of the market can be used for shelter.