Advertisement
Markets

How the Experts See the Market

Three fund managers share their outlook for stocks.

Jim Barrow, co-manager Vanguard Selected Value

"If you miss the first month of the boom, you will have missed a big part of it. Things move very quickly.

"Tobacco is one area that's historically been okay or even good in this kind of sluggish environment. It's a very profitable business. We own UST, Carolina Group and Reynolds American in Vanguard Selected Value. In Vanguard Windsor II, we own Altria and Imperial Tobacco.

"We also like defense com­panies, like Northrop Grumman and General Dynamics. In a recession, the government will try to spend money any way it can, and defense is certainly one way.

Advertisement - Article continues below

"This may be strange coming from a stock jockey, but high-quality municipal bonds are in a unique situation today in that they offer pretax returns higher than those of Treasuries. This is extremely unusual and is an indicator of stress in the financial system.'

Jean-Marie Eveillard, manager First Eagle Global Fund

"The current financial crisis is the worst since the Great Depression.

"Investors want to believe it will come and go as the previous half-dozen crises have because the Fed will flood the system with money. But the Fed's actions are increasing the risks of inflation, of a continuing decline in the dollar and of some holders of Treasury debt saying, 'Hey, our notes are no good, are they?'

Advertisement
Advertisement - Article continues below

"TIPS [Treasury inflation-protected securities] are expensive, but they're still an attractive investment. Remember, it's not just the interest rate that's indexed to inflation; it's the principal, too. Gold can also be insurance.

Advertisement - Article continues below

"Whenever a sector, as with financials today, is under heavy pressure, investors stop discriminating. But the financial sector is not homogeneous. We like American Express's business model. So when the stock declined recently, we acquired a fairly substantial holding."

Bob Rodriguez, manager FPA Capital and FPA New Income

"I am focusing on capital preservation. It is better to save money than to go out there and lose it.

"I smell risk where others don't, so I have 40% of FPA Capital in cash. Our financial system is going through a transition, and when something is changing and I don't understand it, I don't play it.

"The credit crisis has already expanded well beyond the housing market and has seeped into the credit-card and auto-loan industries. I predict that this crisis will become even more pervasive. I believe that there will be more defaults in the area of commercial real estate loans in the second half of 2008.

"The worse the situation gets now, the more optimistic I become. At another point in time, I will be as aggressive and greedy as anyone else."

Advertisement

Most Popular

Chiropractor Trying to Get Business the Wrong Way – Illegally
careers

Chiropractor Trying to Get Business the Wrong Way – Illegally

A new chiropractor’s fledgling business plan to attract patients may sound reasonable at first look, but it’s actually against the law, and the same p…
June 30, 2020
What Are the Income Tax Brackets for 2020 vs. 2019?
tax brackets

What Are the Income Tax Brackets for 2020 vs. 2019?

The IRS unveiled the 2020 tax brackets, and it's never too early to start planning to minimize your future tax bill.
June 20, 2020
13 Luxury Goods That Are Cheaper at Costco
spending

13 Luxury Goods That Are Cheaper at Costco

You could be missing out on huge savings: Costco sells a limited selection of luxury goods at discounted prices, both in-store and online.
June 27, 2020

Recommended

Is the Stock Market Closed for the Fourth of July?
Markets

Is the Stock Market Closed for the Fourth of July?

Independence Day falls on a Saturday in 2020. As a result, the bond and stock markets are closed for a long holiday weekend. Here's a look at the mark…
July 2, 2020
Could Now Be the Right Time to Dial Down Your Investment Risk?
investing

Could Now Be the Right Time to Dial Down Your Investment Risk?

The stock market’s stunning turn of events recently could present a golden opportunity to rebalance your portfolio.
July 2, 2020
New Bull Market? Or Same Old Bear?
Markets

New Bull Market? Or Same Old Bear?

The rally since March has been historic, but it still needs to prove itself.
July 1, 2020
Closing Bell 7/1/20: Nasdaq Hits New Highs to Start Q3
Markets

Closing Bell 7/1/20: Nasdaq Hits New Highs to Start Q3

The first day of 2020's second half kicked off with a mixed trading session that saw Amazon (AMZN) and Facebook (FB) help the Nasdaq to new highs.
July 1, 2020