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Positioning Your Portfolio Amid Global Fears: Pros

Tuesday, 23 Nov 2010 | 2:27 PM ET

Will a military threat from North Korea coupled with an economic fears from Europeequal a market threat in the U.S.? How should investors be positioned? Barry James, president of James Advantage Funds, and Jeffrey Palma, managing director and head of global equity trading at UBS, shared their outlooks.

“We were due for a correction,” James told CNBC. “There’s always an outside event that causes it and this is a piece of the puzzle—but I don’t think this particular rally is done with.”

James said he favors both bonds and stocks, but is avoiding Europe.

“And we like a lot of the Asian countries because they look pretty promising to us—but it’s going to be very volatile,” he warned. “But you can still make money as we have seen this year, if you’re flexible in your approach—not just buy and hold.”

'Lots of Things to Be Very Positive About'

In the meantime, Palma said the increase in uncertainty over the last few weeks have added to the recent market pullback.

“When we look at Europe…things are moving in the right direction in terms of getting resolution, but things are going to linger for a few more weeks. And in that sense, it’s going to be harder for markets to move substantially higher in the short-term, even if over the medium-term there are lots of things to be very positive about,” he said.

“U.S. is in a better spot than Europe, but there’s no way you’ll see U.S. decouple from the rest of the world from an equity standpoint,” Palma added.

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Scorecard—What They Said:

  • James' Previous Appearance on CNBC (Nov. 3, 2010)
  • Palma's Previous Appearance on CNBC (Nov. 18, 2010)

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More Market Views:

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CNBC Data Pages:

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Dow's Top Movers (by percentage):

Top Gainer:

Hewlett Packard

Big Losers:

Walt Disney Co.

Chevron

Caterpillar

Exxon Mobil

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Disclosures:

No immediate information was available for James or Palma.

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Disclaimer

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