Stocks surrendered earlier earnings-fueled gains on Friday as investors began to lock in some profits. So where should you put your investment dollars now? Brian Place, president of Place Financial Advisors, and Peter Boockvar, equity strategist at Miller Tabak, discussed their market outlooks.
“The easy money definitely exaggerated the move on the upside,” Boockvar told CNBC.
“There’s no question that the market deserved to rally from the March lows based on the slow improvement or less bad economic data that we got, and improvement in corporate profits. But there’s no question that what threw fuel on the fire was easy money—asset inflation engineered by the U.S. government.”
Boockvar said if the U.S. continues on this “easy money policy”—a depreciation of the dollar—it could eventually get to “an ugly endpoint.”
“The secular trend is be in hard assets, be anti-Bernanke in terms of anti-dollar in order to protect your assets,” he recommended.
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In the meantime, Place said there’s still a lot of cash sitting on the sidelines that hasn’t found its way into equities.
“Most of the money that has flown into the markets so far this year has gone into bonds,” he said. “So equities still have an opportunity to move higher, especially with the cash on the sidelines.”
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As of yet, Place said the weak dollar hasn’t been a problem.
“There’s no signs of inflation; it has helped the equity market,” he said.
But, he added, “They have to be really careful that bubbles aren’t being created—that would be bad.”
“I would agree [with Boockvar] that you want to be non-U.S. commodities, hard assets are the play. High-yielding currencies and that trend continues. But I just don’t think that we’re done with U.S. equities—there’s still some run here, at least through the fourth quarter, Place said.
Place Likes:
S&P Consumer Staples
S&P Materials
Boockvar Likes:
Shanghai Composite
Gold Comex (Dec)
Silver Comex
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Disclosures:
No immediate information was available for Boockvar or Place.
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