US Treasurys should “definitely” be shorted, as rising rates are going to be a concern once the fears over Japan and Middle East settle, according to James Shelton, CIO of Kanaly Trust.
“Pimco’s sold all of their Treasurys…and who’s going to buy Treasury bonds when QE2 [quantitative easing] ends and potentially there’s not another QE3?” Shelton told CNBC.
Shelton said investors should look at areas where they can get “better yields” that are safer such as MLPs*.
In the meantime, Sarat Sethi, partner and portfolio manager at Douglas C. Lane & Associates, said he is in favor of the tech sector.
“Compared to 10 years ago, most technology companies have huge amounts of cash on their balance sheets, good earnings power, and dividends of 2 to 3 percent,” he explained. “All these companies are increasing dividends, as opposed to two years ago where they were buying back stocks.”
Sethi Likes:
Abbott Labs
PepsiCo
Microsoft
Shelton Likes:
iShares Rus 1K Gr
Doubleline Total Return
Enterprise Products
JP Morgan Alerian MLP
*MLPs: Limited partnerships that are publicly traded, are tax-advantaged investment vehicles, commonly used in the energy industry. To qualify as an MLP, a firm must earn 90 percent of its income through activities or interest and dividend payments relating to natural resources, commodities or real estate.
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Scorecard—What They Said:
- Sethi's Previous Appearance on CNBC (Mar. 7, 2011)
- Shelton's Previous Appearance on CNBC (Feb. 7, 2011)
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More Market Intelligence:
- Beware of 'Double-Dip Scare' in Near-Term: Strategist
- Tech Firms May Be Next to Boost Dividends: Strategist
- Markets Are 'Overreacting' to Geopolitical Events: Economist
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CNBC Data Pages:
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CNBC Slideshows—FYI:
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Disclosures:
Shelton and Kanaly clients own shares of IWF, DBLTX, EPD and AMJ.
Sethi, his family and firm own shares of ABT, PEP and MSFT.
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