GO
Loading...

Chances of Recession Are 'Well Above' 50%: Strategist

Wednesday, 8 Sep 2010 | 10:56 AM ET

Stocks opened higher and kept climbing Wednesday following a weak close in the previous session, as investors brushed off fears over the health of European banks. How should you be positioned in this volatile market? Rod Smyth, chief investment strategist at Riverfront Investment Group, and Mike Rubino, president of Rubino Financial, shared their market insights.

The Early Tick
A check on the markets, with Rod Smyth, Riverfront Investment Group, and Mike Rubino, Rubino Financial.

“What investors between the age of 50 to 70 should be worried about now is the fact that nearly three years after the market peaked, housing prices, GDP, organic personal income, outstanding credit and employment are all lower now than they were three years ago,” Rubino told CNBC.

“A highly volatile and schizoid stock market is not the place for pre-retirees—our clients are primarily in government, corporate bonds.”

And based on the dismal economic situation in the U.S., Rubino said the chances of a recession “are well-above 50 percent.”

Smyth's View:

In the meantime, Smyth advised investors to look into U.S. multinationals and emerging markets.

“I’d rather have risk capital as much as you can tolerate…with companies that are going to grow and grow their dividends,” he suggested.

Rubino Recommends:

For conservative investors: PowerShares DB US Dollar Index Bullish

For moderate investors: iShares Barclays 20+ Year Treasury Bond

For aggressive investors: ProShares Short S&P 500

______________________________
Scorecard—What They Said:

  • Rubino's Previous Appearance on CNBC (May 20, 2010)
  • Smyth's Previous Appearance on CNBC (Aug. 10, 2010)

______________________________
Market Views—Across the Board:

______________________________
CNBC Data Pages:

______________________________
CNBC Slideshows:

______________________________

______________________________
CNBC's Companies in the News:

BP

  • BP Shifts Oil Spill Blame Onto Contractors

Hewlett-Packard

Dell

______________________________
Disclosures:

No immediate information was available for Rubino or Smyth.

______________________________

Disclaimer

  Price   Change %Change
BP.
---
4331
---
HPQ
---
SH
---
ISH BAR 20YTB
---
UUP
---

Featured