These Stocks Are Better Than Bonds: Charts
Investors disappointed with the yield on government bonds should look to good-quality companies with strong dividends such as Deutsche Telekom and Nestle, Robin Griffiths, technical strategist at Cazenove Capital, told CNBC Monday.
According to recent data, investors have started moving out of government bonds and into stocks as risk appetite is on the rise.
"People are now buying quality stocks for the dividend stream because that is superior to government bonds," Griffiths said.
Deutsche Telekom is going to still be around for years to come and has a dividend yield of over 7 percent, he pointed out.
"Here you've got a business franchise, in Europe's strongest economy, with a yield way, way better than any government bond is going to be giving you and probably the quality is approximately equal to government bonds," he said.
Griffiths also recommended Nestle and pointed out that strength in the Swiss franc could benefit a holding in the food producer.
"The market has assumed that President Obama (will be) losing control of the house of Representatives, but probably not the Senate," he said.
A different outcome could cause investors to re-position their portfolios, causing market swings, according to Griffiths.
"On the FOMC, I think the market has psyched itself to expect 'we need shock and awe, we need a trillion dollars and anything less is disappointing,'" he added.
- Robin Griffiths does not own Deutsche Telekom or Nestle assets.