Despite the yield on the Treasury's 10-year note passing 5%, investors are better off with large cap stocks, Dan Genter, President, CEO and CIO of RNC Genter Capital Management told "Morning Call."
“This move is not significant enough to cause a major P/E multiple contraction in this market,” Genter said. He emphasized that the inflation and higher rates will not necessarily hurt stocks in the long run.
Genter suggested investing in such sectors as healthcare, especially in the biotech and the medical device area. In addition, he also suggested getting back to the energy drilling sector, especially deep-water drilling.
“I’d go to the large multi-cap now because they benefit with international expansion, lower dollar," he said. "The small increase in interest rates are mainly fee based now, it’s not going to squeeze interest margins. I’d be taking advantage of the significant pullback we’ve seen in the last few trading days in those stocks.”