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Start Trimming Back on Equities: Market Pro

Where do the markets go from here? Mike Williams, founder and managing partner at Genesis Asset Management, and Barry James, president of James Advantage Funds, shared their outlooks.

“The primary focus is investor psychology,” Williams told CNBC.

“We’ve got massive signs that the crowd simply doesn’t buy into the idea that we’re getting better—we’ll have ups and downs on the way and we’re going to have a couple of companies that miss here and there—but people are focusing on the misses rather than the positives,” Williams said.

James said risks are currently quite high and it’s time for investors to start trimming back on equity positions. (What would he keep? Scroll down for his picks.)

“We’ve just come off of a gusher in the market where we’ve had a huge run-up in a short amount of time,” he said.

“And history shows that they run about 6 months and you make 40 percent or more and then you tend to get a correction.”

More Market Intelligence:

James said unlike in the past where the markets saw a “junk rally,” where stocks that were losing money and had fallen a lot being rally leaders, quality companies are beginning to reemerge.

CNBC Data Pages:

“Companies with good earnings that are selling at reasonable valuations have been holding up well—and we see opportunities there,” he said.

“And precious metals where you have overseas sales and companies with high dividend yields. I think companies like those will do well in this environment even if we have a correction.”

Williams Likes:

S&P Technology

S&P Materials

S&P Industrials

James Likes:

SPDR Gold Trust

Cummins

CenturyTel

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Disclosures:

No immediate information was available for James or Williams.

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