September Strategy Session
Happy new month! Historically, September is the worst month for stocks. All three major indexes have declined an average of 1% during September, while volatility remains high. But that doesn't mean it's time to sit on the sidelines.
Maria Bartiromo held a strategy session so you can protect your portfolio during volatile times.
Our experts: Pete Sorrentino, Senior Portfolio Manager at Huntington Asset management and CNBC Contributor Ron Insana, who’s also portfolio manager of TheStreet.com’s Market Movers.
BULL VS. BEAR
Sorrentino could see the market running to 1100 on the S&P without too much trouble from here. However, he is cautious because he believes this is a bear market rally. Sorrentino is telling his clients don’t be too optimistic and complacent. Sorrentino is focusing on companies that have both volume growth and pricing growth.
Insana, on the other hand said the recent sell-off in China might spill over more than people realize and tension in the Middle East will continue to put pressure on the markets. In August, Insana went to all cash.
Insana said there is no sin in stepping aside and cashing-in on your profits. If you doubled your money in any particular stock, you take half off the table and you're playing with house funds.
Insana’s other play: Long oil. There are increased tensions with Iran, we could see oil prices spike AND that would also exacerbate the sell-off in stocks.
Sorrentino noticed that the dollar play migrated from gold and is now playing off in crude oil. Look at natural gas versus crude oil, and there are two different dynamics going on there. Sorrentino said “We've tended to go in the energy complex where we think there really is a very solid business case.” His top pick among the refiners: Valero .
Sorrentino said the big thing to watch out for in September is new leadership emerging, not broad-based leadership, but individual companies with defensible cases that start to separate themselves from the pack. If this correction does materialize between now and the end of October, Sorrentino will go back to the stocks that he really liked a lot – banks, home builders, select tech companies, media and telecom names.
- The Dow 30 in Real Time
- Why September May Not Be that Scary
- Glowing Data No Longer Enough for US Stock Bulls
- The CNBC Stock Blog
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