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Stocks Still Best Bet for Long Term: Hobson

Wednesday, 17 Oct 2012 | 5:46 PM ET

Looking long-term from the current market, stocks still stand to outperform all other investments, Ariel Investments President Mellody Hobson said Wednesday on CNBC.

On "Fast Money , " she made the bull case for stocks.

"One, you need stocks for growth. That's just a nonstarter, " Hobson said. "Secondly, the stock market has outperformed all other investments over the long-term since 1926. Thirdly, we've never had two back-two-back decades of negative returns for the S&P 500 . It has never happened. So the last decade that we had, the likelihood that that would happen again, it just wouldn't happen."

Hobson pointed out a significant difference between 2012 and 2008.

Stocks Still Best Bet for Long Term: Hobson
Looking long-term from the current market, stocks still stand to outperform all other investments, Ariel Investments President Mellody Hobson says.

"When you look at businesses, especially American businesses, they are actually in great shape, " she said. "They have so much cash on their balance sheet, that even if we have another bump in the road, they are so much better back in '08 when we had that near-disaster scenario play out."

Among her top picks in financials: KKR , Blackstone Group , Janus and T. Rowe Price .

Hobson even challenged the notion that investors in their 70s should be out of stocks entirely.

"Well, you still need some equities in your 70s because we live longer than we used to, " she said.

"If you look over the long term, you win in the stock market, " she added. "Patience gets rewarded."

Trader disclosure: On Oct. 17, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Karen Finerman is long AAPL; Karen Finerman is long AAPL PUT SPREADS; Karen Finerman is long BAC; Karen Finerman is long BAC CALL SPREADS; Karen Finerman is long JPM; Karen Finerman is long JPM CALL SPREADS; Karen Finerman is long WMT; Karen Finerman is long TGT; Karen Finerman is long MSFT; Karen Finerman is long COMM; Karen Finerman is long RLGY ;Karen Finerman is long GOOG; Karen Finerman is short IWM; Karen Finerman is short MDY; Karen Finerman is short SPY; Guy Adami is long C; Guy Adami is long GS; Guy Adami is long INTC; Guy Adami is long AGU; Guy Adami is long MSFT; Guy Adami is long NUE; Guy Adami is long BTU; Brian Kelly is long QQQ; Brian Kelly is long SMH; Brian Kelly is long FXP; Brian Kelly is short XLF; Brian Kelly is short EWA; Jon Najarian is long GS; Jon Najarian is long JPM; Jon Najarian is long FB; Jon Najarian is long MSG; Jon Najarian is long PHM; Jon Najarian is long DHI; Jon Najarian is long LEN; Jon Najarian is long BBBY.

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