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Fed Won't Raise Rates For a Year: Investment Manager

Stocks opened lower on Tuesday, following a topsy-turvy session on Monday where markets staged a late rally. How should you be positioning your portfolio? Ernie Ankrim, senior markets advisor at Russell Investments, and Anita Clemons, vice president and manager of investments at Stock Yards Bank & Trust Company, shared their market insights.

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AP

“We might be surprised by the data out in the next few weeks, so I’m not too worried about the short-term move in this market," Ankrim told CNBC.

"But I am concerned that what we’re going to see in the data in the next two months will give us a head-fake on the upside,” he added.

Although he’s not necessarily recommending investors get out of equities, Ankrim said spreads are wider than usual.

“We’re talking specifically about investment-grade companies where high yield has done exceptionally well,” he said. “We think for people who are worried about risk, and I think we have a risk trade coming up in the next few months, that they can get a really good return on just outside of investment grade debt that looks pretty attractive.”

“We think that the equity markets are strong, they’ll hang tough, but there’s not a lot of upside or downside—it’s going to be fair market for a while unless the market takes off on the strength of the economic news that we see coming in the next couple of months,” he added.

In the meantime, Clemons said she doesn’t expect the Federal Reserve to raise interest rates for at least another year.

“If you did see a ratchet-up in rates, it would be hurtful for a lot of the small businesses which will end up drabbing the economy out of the recession,” she said.

Clemons said she is playing the run-up in gold prices by buying individual gold stocks instead of the physical commodity.

Winterizing Your Portfolio - A CNBC Special Report
Winterizing Your Portfolio - A CNBC Special Report

“With all of the sales with international exposure that companies have, [the dollar’s] been a big driver to drive stocks up,” she added.

“But there’s probably still a lot more room. If earnings continue to come in good and if inflation comes in under control, we still think there’s room at the top. But keep those asset allocations balanced correctly,” Clemins cautioned.

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Disclosures:

No immediate information was available for Ankrim or Clemons.

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