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Large Banks Are a 'Good Long-Term Play': Strategist

Stocks traded higher Monday ahead of the expected renewal of Bush-era tax cuts, along with other cuts and unemployment benefit extension. How should investors be positioned? Jamie Cox, managing partner at Harris Financial Group and Quincy Krosby, chief market strategist at Prudential Financial shared their insights.

"Throughout most of 2010, most of the integrated oil companies really haven’t participated in the run-up,” Cox told CNBC. “ExxonMobil and Chevron have been behind the curve and they’ve been silently buying up natural gas companies trying to position themselves for the future—so energy is definitely the place to be.”

In addition, Cox said largerfinancials are a "good long-term play."

“Financials are finally getting themselves out of this TARP game and outside government control and the larger banks are going to be able to earn their way out of this,” he said. “You could buy the shares now and wait for the cash flow to be paid in terms of a dividend.”

In the meantime, Krosby said she has been using a "barbell strategy" for her overall portfolio.

"[We've been] talking about the prominence about the large-cap dividend paying stocks, but we also want to mention that you have to have a continuing sleet of small caps in your portfolio,” said Quincy.

Quincy noted that small caps tend to perform better as GDP growth picks up. In addition, she expects to see a pick up in M&A activity in the early part of next year, which will also benefit small-caps stocks.

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Scorecard—What They Said:

  • Cox's Previous Appearance on CNBC (Nov. 18, 2010)
  • Krosby's Previous Appearance on CNBC (Nov. 5, 2010)

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Disclosures:

No immediate information was available for Cox or Krosby.

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