The market is gaining for a second straight day Wednesday, giving support to the notion that brighter days are ahead. Jamie Cox, managing partner at Harris Financial Group, and Subodh Kumar, chief investment strategist at Subodh Kumar & Associates, told CNBC Wednesday a bottom has likely been reached—but they differ on how quickly the market will return to previous heights.
Cox believes the market will begin to rise sooner rather than later.
"All the negative sentiment we’ve seen over the last couple of months is baked in the market and is completely overblown," Cox said.
He recommends investors go for yield by buying corporate bonds, and stocks of utility companies and large multinationals. (For more on this topic see: Dividend Stocks: Strategists Divided on Outlook).
"High-quality multinationals with fantastic dividend yields in excess of 3-4 percent I think represent extraordinary value for any investor, whether short-term or long-term," Cox said.
Among bonds, defaults among high-quality companies are very low and Cox believes investors can even find attractive values among higher-yielding corporate bonds without having to buy equities. "I think anywhere along the curve in corporates is actually pretty attractive," he said.
Kumar agrees the market is bottoming out, but he expects stock prices will rise and fall over the next few months before trending higher. He believes that it will take until the middle of 2011 before the market exceeds the highs of 2010.
"We’re bottoming out, but recovery will be slower," Kumar said.
Kumar favors value-oriented stocks with growth prospects in the energy, health care and information technology sectors. Information technology stocks have strong balance sheets and good growth prospects and the cyclical aspects of the semiconductor industry is improving, he said.
"All the various aspects that could be positive, I think right now they favor information technology much more than any other sectors," Kumar said.
Scorecard — What They Said:
- Kumar's June 1, 2010 CNBC Appearance
- Cox' March 12, 2010 CNBC Appearance
Opposing Market Views:
- 'Fast' Traders: Is S&P Above 1040 a Buy Signal?
- Dow Showing 'Great Depression' Signs: Chartist
- Art Cashin: Markets Watching One 'Critical' Report
CNBC Data Pages:
CNBC's Companies in the News:
Bank of America
Disclosure information was not available for Jamie Cox or Subodh Kumar or their companies.