Let the investing games begin.
CNBC.com's Million Dollar Portfolio Challenge is underway, and investment gurus are weighing in on the best way to invest a million dollars in today’s volatile market.
“Get out of dollars and get into foreign assets,” Peter Schiff, President of Euro Pacific Capital, told Mark Haines and Erin Burnett on “Squawk On The Street.” “Get into foreign currency denominated conservative stocks,” such as utilities, property trusts, natural resources and precious metals, including gold.
Schiff also advises investors to have a lot of foreign cash, such as euros, Swiss francs, yen and Australian dollars. Last week’s global selloff should not be a concern, Schiff added, because in the bigger picture, foreign stocks are better positioned amid U.S. overconsumption.
Stay out of U.S. stocks, he suggests, because fundamentals are “terrible.” The Dow industrials may have hit a new high, but adjusted for inflation, it’s still below the peaks of 2000 and headed for the lows of 2002, he said.
Playing volatility will be key in CNBC.com's Portfolio Challenge, which gives players a million CNBC Bucks to trade up to 50 times a day. The investor with the largest percentage gain each week will win $10,000 and qualify for the Finals. Ten weekly winners and the ten highest-ranked players start over on May 14 with a new million-dollar portfolio. The winner over the next two weeks takes home the real deal -- a million dollars in cash.
U.S. equities are important for any long-term growth-oriented investor, Michael Cuggino, president and portfolio manageroffive-star fund Permanent Portfolio Funds, told Liz Claman on “Morning Call.”
Diversify, Cuggino advises, and get a mix of U.S. stocks, gold and other precious metals, commodities and natural resources. He recommends buying stocks in financial services, technology, biotech, pharmaceuticals, media and entertainment.
“U.S. stocks weren’t expensive a week ago and they’re less expensive now,” Cuggino said. “The general trend for the U.S. economy is one of growth. We have slowdowns and recessions, etc. in the short term. But in the long term, we’re growing and we expect that to continue.”
If you’re looking for short-term plays, Liam Dalton, president of Axiom Capital Management, suggests cash and stocks not highly correlated to the market.
“We don’t have enough evidence that the corrective process that began early last week has changed at all,” Dalton told Sue Herrera on “Power Lunch.” “Right now the price action is suggesting that the market is still on the defensive, there’s been no resumption of buying in the leading relative strength issues, and price is still not telling you what to do yet and as a result, I’d stick to longer duration themes.”
But Peter Simmons, CEO of Bingham Legg Advisers, suggests investing in large caps.
”We would allocate primarily to the megacap stocks, stick with the S&P 100,” he said, also on “Power Lunch.” “We also like allocations to Japan and commodities as well.”
Simmons also recommends gold, base metals, energy and the Power Shares DB (DBC) fund.
Whether you’re a bull or bear, have a long-term strategy or one solid week, top money managers agree there’s more than one way to invest a million dollars. And it depends on what best fits your goals and risk personality.