Dwyer said the economy is in a “capital V-shaped recovery,” driven by business spending and also some consumer spending.
“Financials is going to act a lot like tech media and telecom did off of the 2002 debacle,” he said. “They had the sharpest recovery in the beginning of the bull market and they flat lined for a couple of years. However, I think the real exciting part right now is in the industrial space.”
In the meantime, Swanson said he is interested in the health care and technology sectors—particularly software.
“We’re going through some revolutions in software and it is a big export component,” he said. “Right now, the P/E is relative to historic norms in the software sub-segment in tech are very low. It’s not dirt cheap like it was 6 months ago, but extremely cheap by any sort of historical pattern given the growth of the earnings which we expect.”
Additionally, he recommended investors to look into the larger cap dividend paying stocks.
“I don’t see any inflation risk in the next year … But 2 to 3 years down the road, inflation could come back and dividend-paying stocks have historically been a terrific way to combat inflation surges and that’s the part of the market that has lagged,” he said. “So I would begin to look to migrate toward dividend paying international type companies.”
No immediate information was available for Dwyer or Swanson.
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