Avoid Dividend Stocks in Rally: Masters
Investors could see the market continue to climb but should avoid higher-dividend yielding stocks, Seth Masters of Bernstein Global Wealth Management said Monday.
"Actually, I would agree that the thing to not do is to go after the higher-dividend yielding stocks that actually now make up much more of the index than they ever have before," he said. "They're now 44 percent of the index. The long-term average is only a third."
On CNBC's "Fast Money," Masters said that higher beta stocks would be preferable, adding that he was bullish on most sectors.
"The reasons why we like stocks is because the fundamentals incredibly good," he said. "Balance sheets have been as good as they've ever been.
"If stay there and continue to see decent growth in the economy, which is what we expect, there's a lot of room, we think, for stocks to have a decent return. It's not going to be stratospheric, but it could be high single digits."
Masters said those levels of returns were far better than the sub-2 percent yields in 10-year Treasuries.
Retail investors also could lead the market higher, he added, noting that the biggest buyer of stocks have been companies themselves.
"The retail investors have nothing to do with the fact that the S&P is up 130 percent since March of '09," he said. "So I think that actually the stock market could go up with the retail investor there or not."
Trader disclosure: On March 11, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Pete Najarian is long AAPL stock; Pete Najarian is long C calls; Pete Najarian is long INTC stock; Pete Najarian is long JPM calls; Pete Najarian is long XLF calls; Pete Najarian is long CSCO calls; Pete Najarian is long YHOO stock; Pete Najarian is long BBRY stock; Pete Najarian is long SBUX stock; Pete Najarian is long FB stock; Pete Najarian is long MSFT stock; Pete Najarian is long VLO calls; Pete Najarian is long NOK calls; KAREN FINERMAN FL FKL AAPL; KAREN FINERMAN FL KFL BANK OF AMERICA; KAREN FINERMAN FL KFL CITIGROUP; KAREN FINERMAN FL KFL JPMORGAN; KAREN FINERMAN FL WALMART; KAREN FINERMAN FL TGT; KAREN FINERMAN FL KFL MSFT; KAREN FINERMAN FL KFL GOOG; KAREN FINERMAN FS SPX; KAREN FINERMAN FS SPY; Tim Seymour LP AAPL; Tim Seymour LP BAC; Tim Seymour LP SBUX.