Technological innovation will boost productivity, and that in turn will boost stocks, says money manager Ken Fisher, author and CEO of Fisher Investments
"The elephant in our world's living room is, simply, technology," he writes in an article for Forbes magazine.
"While I like tech stocks, the big beneficiaries will be the rest of us--and firms that derive increased productivity or conception of innovative products and services. . . . Productivity will rise as this bull market endures." Productivity fell an annualized 1.8 percent in the fourth quarter.
So what stocks should we look at to take advantage of this trend?
Fisher likes UnitedHealth Group, the country's largest healthcare insurance company. It represents "a slow-growth, high-quality way to angle the coming Baby Boomer healthcare cost spiral," he explains. "It's both America's largest single health carrier (the one my firm chose for its needs) and a leading provider of technology and services to the broader healthcare universe."
In addition, he thinks drug titan Pfizer is a good bet. It suffered last year amid weak earnings and its failure to acquire AstraZeneca. "Yet its basics are sound, drug line exceptionally diversified and growth potential reasonable," Fisher writes.
He also likes Sands China, the Macau arm of Sheldon Adelson's Las Vegas Sands gambling and resort empire. Although CEO Edward Tracy is leaving the company in March and China's crackdown on alleged gambling corruption, "bet on Adelson's ability and Asians reflocking to gambling as an opportunity."
Meanwhile, Nobel laureate economist Robert Shiller of Yale University says he's considering a move to European stocks from U.S. stocks because of cheaper valuations overseas.
The MSCI Europe index had a trailing price-earnings ratio of 17.37 as of Jan. 31, compared with 20.44 for the S&P 500 Feb. 13.
"I'm thinking about getting out of the United States somewhat. Europe is so much cheaper," Shiller, who has about half his portfolio in stocks, tells CNBC
Already he has invested in market indices in Italy and Spain. The FTSE MIB Index of Italian stocks has returned 13.2 percent so far this year, and the IBEX 35 Index of Spanish stocks has returned 5.7 percent. The S&P 500 has returned 2.1 percent.
Investment returns are unlikely to reach recent lofty levels in coming years, Shiller notes. That puts a premium on saving for retirement.
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