“There’s still some value in healthcare,” he says. “The energy sector is still cheap.”
In particular he likes California biotech company Amgen , oil field services company Baker Hughesand oil giant Royal Dutch Shell .
While utility stocks have had a big run up, Richter says electricity company Exelon is an exception, making it a good bet.
James Swanson, chief market strategist with Boston-based mutual fund MFS, says investing in dividend-paying stocks is a no-brainer.
He notes that dividends represent 40 percent of investor returns in the long run and are much less volatile than corporate earnings.
Contrary to some other market strategists, he also likes big technology companies, such as Intel.
He expects a surge in demand for the products Intel and other tech giants produce because companies in the United States have been putting off such purchases.
Jim Paulsen, a market strategist with Wells Capital Management, thinks investors should start putting their money where others aren’t.
He’s optimistic that concerns about Europe will fade to “chronic problem” status and the economy and stocks will perform better than expected.
With that in mind, Paulsen says he would be wary of what he calls “steady-Eddie consumer staples, risk-averse utilities and dividend-paying large caps.
“Not that they’re going to get killed, but everyone ran there [last year] and bid up their values,” he says. “I’d be underweight there and take stuff people have been throwing out the window in the summer.”
On that list would be cyclicals and emerging market stocks, “which everyone left for dead,” he says.
For cyclical sectors, Paulsen likes U.S. industrials and materials best.
He notes that industrial companies were downtrodden because they were among those hardest hit by supply-chain problems coming out of the post-tsunami environment in Japan.
Manufacturers should gain an improved competitive position, meanwhile, from what he expects to be a weaker US dollar, as the currency loses some of its “safe-haven” premium.
For emerging markets, he recommends being diversified across the developing world, not just in China and India.
“Given how much of the emerging market was left for dead, it’s a great time to look at some of the frontier market as well,” says Paulsen.