Tags: Ritholtz | Cash-out | Stock | Market

Barry Ritholtz: Don’t Cash Out of the Stock Market Yet

By    |   Sunday, 19 May 2013 08:04 PM

Market timer and financial commentator Barry Ritholtz says investors should give the stock market the "benefit of the doubt" and stay in equities.

It would be a mistake to "fight the tape" that has led stocks to recent record-breaking highs, he told Yahoo Daily Ticker.

Ritholtz said many stock professionals are still underinvested in U.S. equities, and he predicted they will be forced into buying.

"Give the market the benefit of the doubt," he said. "But don’t be surprised if we see a little seasonal weakness. You can't go up 20 percent every four months."

Editor's Note: Billionaires Dump Stocks. Prepare for the Unthinkable.

Ritholtz said he is overweight in dividend-paying stocks and the health care sector. He said his top picks include Berkshire-Hathaway, Pfizer, DuPont and Visa. Ritholtz told Yahoo that individual investors should adhere to an investment plan in order not to be spooked by market volatility. He also recommended asset diversification.

Investors should not "let your own emotions be your worst enemy," Ritholtz warned.

Ritholtz, CEO of Fusion IQ, said in his "The Big Picture" blog Friday that another factor in the surge of stock prices is that fewer U.S. shares are available for purchase.

He cited Bloomberg data showing the S&P 500 now has 2.3% fewer shares than it did in July 2011, when share total reached its high for the bull market. The drop in total stock outstanding accounted for 25% of the past year’s earnings-per-share growth for companies in the index. 

MarketWatch reported J.P. Morgan strategists raised their year-end target on the S&P 500 to
1,715 from 1,580. The strategists said the average gain in the fifth year of a bull market is 19 
percent, which implies an increase to about 1,719.

Meanwhile, UBS strategists on Friday upgraded global financials to overweight, MarketWatchreported. UBS said "the global economy is healing, capital has been rebuilt, and the sector has moved from being a net issuer to net distributor of cash."

Editor's Note: Billionaires Dump Stocks. Prepare for the Unthinkable.

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Market timer and financial commentator Barry Ritholtz says investors should give the stock market the benefit of the doubt and stay in equities.
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2013-04-19
Sunday, 19 May 2013 08:04 PM
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