US Markets

Top investor Richard Saperstein: It's time to own stocks, move to full equity positions

Saperstein: We've become bullish since the election

The Trump administration's new policies will dramatically change the investment landscape for the better, Richard Saperstein, chief investment officer for HighTower Treasury Partners, said Thursday on CNBC.

Saperstein, who's ranked seventh on Barron's Top 100 Advisors for 2016, told CNBC's "Fast Money Halftime Report" he's become bullish since the election and is advising his clients to follow his lead and increase their exposure to stocks right away.

"For clients who have a one-to-four-year investment horizon, it's time to own stocks and move to full equity positions," he said. "If you're a short-term investor, you have a one-to-six-month horizon, there will be air pockets. Wait for one of them if it happens, but for long-term investors, this is a different landscape to invest in."

He noted that the market is pre-loaded and has gotten ahead of itself in the short run, and as a result, he said, he's now underweight banks because they've moved "way too far." He expects to see a lot of rotation in the market, with health care — which he says has been "way oversold" — and technology making a comeback.

Top investor Richard Saperstein's stock picks

President-elect Donald Trump speaks at the USA Thank You Tour 2016 at the Wisconsin State Fair Exposition Center December 13, 2016, in West Allis, Wisconsin.
Don Emmert | AFP | Getty Images

Among his new investments are Apple, Fluor, Canadian Natural Resources and the Powershares Buyback ETF — which consists of companies that have bought back at least 5 percent of their market cap in the last 12 months. That ETF includes companies such as Boeing, McDonald's, Lowe's, AIG and Qualcomm. The ETF is up 13.5 percent year to date.

His "energy play" is Fluor, an $8 billion company in power, infrastructure, services and mining, which he described as a "Make America Great Again small cap." He noted that investors who believe in "the infrastructure story" may want to take a look at Fluor, where 55 percent of its revenues are domestic, he said, with 15 percent of its revenue coming from the U.S. government. The stock has a 1.8-percent dividend yield and a free cash flow yield of about 7 percent.

He noted that Apple is an attractive stock because of the possible repatriation of its $216 billion in offshore money. If they repatriate that, he said, there could be more buybacks and the stock would be "net-positive." Fifty percent of Saperstein's HighTower Treasury Partners portfolio is in equities, with 30 percent in bonds and 20 percent in alternatives.

He argued against owning any bond proxies and interest-sensitive stocks, saying he expects higher inflation moving in to the first quarter of next year as a result of the base effect of inflation: rising wages, health care and some rents.

"We're not going to get it all, the timing is going to be later than we think and we're going to have disappointments along the way," he said. "But I think if you look out two to four years, the investment landscape could be a lot better than it was for the last four years, and that's really why equity should be bought right now."