Stocks rose Tuesday as global stimulative measures reassured investors that governments were taking steps against economic weakness. Bill Smead, CEO and CIO of Smead Capital Management and Ryan Detrick, Chief Technical Strategist at Schaeffer’s Investment Research shared their best plays.
“When you look back at history, the fourth quarter is the strongest quarter by far in the past 20 years—the Dow’s gained about 5 percent on average,” Detrick told CNBC. “When September is up that much, then it’s more bullish for October and more bullish for the upcoming fourth quarter.”
Detrick said based on the current negativity and skepticism among investors, the contrarian indicator suggests the year-end rally is in place and can continue.
“So consumer discretionary, retail, restaurants and housing, those are areas that have led quietly and should continue to lead as this market works its way higher,” he suggested. (Scroll down for his full picks.)
In the meantime, Smead said investors should own companies that can perform well regardless of the economic environment.
“We like media because as people slowly become more confident, they will buy more and find out what to buy on the media outlets we own,” he said.
SPDR S&P Homebuilders
Media: Disney , Comcast , Gannett
Pharmaceuticals: Amgen , Merck , Mylan
Select Financials: Wells Fargo
Scorecard—What They Said:
- Detrick's Previous Appearance on CNBC (Sept. 22, 2010)
- Smead's Previous Appearance on CNBC (Aug. 26, 2010)
More Market Intelligence:
CNBC Data Pages:
Smead owns shares of DIS, CMCSK, GCI, AMGN, MRK, MYL and WFC in his SMVLX fund.
No immediate information was available for Detrick or his firm.