Things Are Wide Open in Equities: Fund Manager
Even with no change in the Federal Reserve’s policy of low interest rates, it’s a “great environment for stocks,” George Young, portfolio manager for the Villere Balanced Fund, told CNBC.
He spoke Tuesday after the Fedannounced it is keeping interest rates near zero until late 2014 and before JPMorganChase announced plans to raise its dividend and buy back shares, sparking a late market rally.
“As low as interest rates are right now, companies can borrow money, they can continue to make the widgets,” said the manager, whose fund is rated five stars by Morningstar. “I think things are still wide open in equities.”
Investors must stay in for the long term, he said, adding, “Don’t worry about the volatility. Volatility is part of investing.”
Young has three picks that he says have the potential for strong growth and pay dividends.
There’s Pool Corp., the largest wholesale distributor of swimming pool supplies. “We think it can grow 20 percent,” he said, adding that it pays a 2 percent dividend and it has low debt.
Young also likes3D Systems, which makes rapid prototyping machines. “If you can design it, they can make it,” he said. He also likes Northern Oil and Gas.
In the same interview, Scott Kimball, co-portfolio manager of the five-star-rated BMO Tech Corporate Income Bond Fund, said he looks for corporate bonds that are “attractively priced on a yield basis” and “where the underlying business fundamentals are still favorable.”
He believes it is still “a good environment for corporate bonds,” despite Tuesday's Fed announcement.
"The collapse in Treasury yields throughout 2011 offers attractive opportunities for 2012 in U.S. corporates and high yield," he said.
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Disclosure information was not immediately available for George Young, Scott Kimball, or their companies.