Time to Buy Cheap Stocks, High-Yield Bonds: Strategists
Special to CNBC.com
It's a good time to be invested in stocks and high-yield bonds — even Venezuelan bonds, Anne Lester, portfolios manager of the JPMorgan Income Builder Fund, told CNBC Thursday.
"When we look at building a portfolio for yield we're focusing on a place where the high yield is," even Venezuela, said Lester, whose fund rates four stars from Morningstar.
"High yield is clearly one of the better places to go. From a bottoms-up selection perspective, what we're trying to do is weigh the income we're getting from securities, the cost of those securities and possible negative outcomes that could happen," she said.
The Bolivarian Republic Venezuela 12.75 percent bond is part of a portfolio that also includes DuPont, Time Warner and Coca-Cola . Bonds make up over 48 percent of the portfolio compared with nearly 41 percent stocks in, among other sectors, real estate, financial services and energy.
Meanwhile, Phil Orlando, chief equity market strategist at Federated Investors, said in the same interview he doesn't like Treasurys but likes taxable bonds in the fixed income market. Mainly he is "heavily overweighted" in stocks because they are very cheap right now.
After being heavily invested in such defensive areas as health care and consumer staples Orlando said he's starting to slowly invest in economically sensitive areas including technology, cyclicals and industrials. He did not divulge specific stocks.
"At this point, we're on the stock side of the equation and this move up to 1350 [on the Standard & Poor's 500] over the last few weeks has more legs over the balance of the year," he said.
What concerns him right now are the discussions on the debt ceiling in Washington and the tone of second-quarter corporate earnings. While he can't predict the latter, "the fact that this $14 trillion debt ceiling issue is moving along and these guys [in Washington] are making progress is certainly good news."
CNBC Data Pages:
- Dow 30 Stocks—In Real Time
- Oil, Gold, Natural Gas Prices Now
- Where's the US Dollar Today?
- Track Treasury Prices Here
Disclosure information was not available for Anne Lester, Phil Orlando or either of their companies.