Investors should have a long-range plan and buy stocks rather than bonds, Oakmark Fund portfolio manager Bill Nygren told CNBC Thursday.
"The best idea for 2012 is for investors to increase their equity exposure and decrease their bond exposure. We think stocks are cheap. We thought that a year ago," said Nygren, named by Morningstar as one of its five best portfolio managers for 2011.
There are a lot of stocks trading at "very, very attractive valuations," he said, with more cash on company balance sheets and better returns than bonds.
He also said investors should look beyond next week or next month but look at "five years from now. Investors chase past performance rather than look at current valuation. Most of the stocks that we own today sell at barely a double-digit [price/earnings ratios] on expected 2012 earnings” and have ”significant share repurchase plans in place. Most of them are paying reasonable dividends."
The fund's biggest holdings are shares of Comcast, majority owner of CNBC. It also owns shares of Intel , Mastercard , Dell, JPMorgan Chase and Capital One , among others.
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Oakmark owns shares of the companies mentioned. Information on Nygren's holdings was not available.