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Choose Companies — Not Sectors: Stock Picker

Markets have rallied significantly from the lows in March, but how should investors play the second half of the year?

David Kelly, chief market strategist at JPMorgan Funds, and Sarat Sethi, partner and portfolio manager at Douglas C. Lane & Associates, shared their outlooks and investment strategies.

(For Sethi's stock picks, scroll down.)

“We’ve come out from the abyss and those who stayed invested have done well,” Sethi told CNBC.

“There are going to be, definitely, potholes—the train hasn’t left the station. Over the next 3 to 5 months, as we digest new earnings, stocks are going to go up and there are going to be opportunities—but it’s no longer going to be sector plays, it’s going to be stock-specific.”

More Investor Intelligence:

Sethi told investors that the market won’t necessarily return to the highs before the recession—so investors shouldn’t count on generally “being in the markets,” but should be careful where they place bets.

In the meantime, Kelly said investors should be prepared for a quick turnaround in the economy.

“In general, I like technology and I think financials and health care will come back,” he said.

“Be invested—this economy will turn around and will probably grow a little bit more strongly once it starts growing than what people expect.”

Sethi Likes:

Ecolab

Visa

Western Union

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Disclosure:

No immediate information was available for Sethi or Kelly.

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CNBC Slideshows:

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