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Buy Equities—They're the Best Place to Be: Strategist

Some investors remain skeptical about the market rally despite its strong performance in the last few weeks. Anthony Chan, chief economist at JP Morgan’s Private Wealth Management, and Bruce McCain, chief investment strategist at Key Private Bank, told investors why they should still be investing in equities.

“Normally as you come off a deep recession, you see a strong rally that goes on for quite a while and the tendency is for people to be skeptical about the recovery and that the rally can continue,” McCain told CNBC.

“We still think there’s quite a bit of cash on the sidelines for people who may be in bonds or other investments that will come back to equities to drive this market further.”

McCain said the equity market is the best place to be and expects it to continue performing well throughout the year.

More Market Optimism:

  • Nasdaq to Hit 2,266 by Sept. 8: Charts

“You’ve gotten some cost saving that allowed companies to beat expectations, and now, if they can get revenue increases, a lot more is going to drop through the bottom line and we think that will help fuel the rally into the fall and into the winter,” he said.

In the meantime, Chan said he sees inventories being replenished in the second half of the year, which will give an increase to the GDP.

Counterpoint — The Pessimists:

“With the weakness we saw in the inventories in the first quarter and the second quarter…those inventories are going to be replenished in the second half of the year and that’s going to give a big boost to the overall real GDP,” said Chan.

“We’re also going to get a boost from the exports, which are improving in this situation. As global recovery picks up, exports start to do a little better and the weakness in the U.S. still holding onto the imports.”

Disclosure:

No immediate information was available for Chan or McCain.

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