We are in a bear market rally and a multi-year deflationary cycle, said Peter Sorrentino, senior portfolio manager at Huntington Asset Advisors. He told investors how they can avoid the slump.
“If you look at the dollar on its own, it tells us that the dollar is going to be softer," Sorrentino told CNBC. "So there are sectors, the consumer in particular, that are going to suffer from that. [Meanwhile], the industrial sector, basic materials—they’re going to do well in that environment—they’re going to have pricing power. So we want to go where the tide is rising and that takes us into the early cyclical industrials.”
In the meantime, Sorrentino said investors will have to wait until 2014 for the U.S. consumer and government to start getting their balance sheets in order.
“We’ve dug a big hole—filling it in and crawling out of it is going to take a long time," he said. "So we think you’ve got to get used to the concept. Trade the market, be willing to move rapidly and exploit opportunities.”
Sorrentino said investors should focus on smaller, international companies that benefit from the weaker dollar.
No immediate information was available for Charlop or Sorrentino.
Top Basic Materials Companies:
Goodyear Tire & Rubber