Page 21 - Investment Advisor March 2021

stocks move a little too far upward. What’s an example of a stock you like [The next biggest threat is] the geo-
…We were able to take some money related to home delivery? political climate. We’re already hearing
off the table on three names that ran FedEx, a package delivery company saber-rattling out of North Korea, and
rapidly higher. We thought it pru- that’s categorized as an industrial. It has the Middle East is always a powder keg.
dent to let the “herd” have a few of benefited mightily from all the online China is a big concern [too].
our shares in Nordstrom, Seagate shopping and will continue to do so.
Technology and Viacom. It’s trading at a very reasonable price. What’s your best advice to FAs on how to
Other industrials that we like include help clients during this challenging time?
What good, in general, may have come Caterpillar, Eaton and Cummins. The hope is that, when the market cra-
out of the GameStop madness? tered last spring, advisors altered their
I’m thrilled that a new generation of What about the technology and clients’ allocations by taking money
investors is coming to understand the health sectors? out of safer investments and putting
merits of investing. Many will end up We like Cisco Systems because they it into risker ones. As the market has
with big losses, as the valuations on a make a lot of the hardware that’s needed rebounded, now is the time for those
number of the stocks they fancy are to work online to conduct commerce who have been overloaded in some of
divorced from fundamentals; and many from home. And we like data storage the big winners — growthier stocks — to
view the stock market as a casino or company Seagate Technology. Both are take money out of them and put it into
video game. But history shows that equi- very reasonably valued, plus we get value stocks because that’s where the
ty prices, on average, appreciate over divided yields with them. opportunities reside.
time. So those that stay in the game — Both CVS and Walgreens are partici- Keeping clients from being their
and properly diversify — have the odds pating in the rollout of COVID-19 vac- own worst enemy is the reason advi-
working in their favor. cines. CVS Health Corp. is my choice. It sors should exist. The emotional part
runs the gamut as far as health care goes. of investing is so challenging. The
What are your expectations for It’s trading at a very reasonable price majority of investors don’t have the
earnings growth this year? and always has a generous dividend capacity to buy, patiently hold and
We believe there’ll be a much better yield. CVS [also] has a pharmacy benefit then reallocate.
economic environment. Many value management company as well as Aetna
stocks had an awful 2020 — their busi- managed care. What’s a pressing need for FAs to fill
nesses were severely challenged by the going forward?
pandemic. Earnings growth is another How do you expect the stock market to There are many disconcerting events that
catalyst for value stocks, in particular. fare under President Joe Biden? this country will continue to go through.
With the reopening of the economy and Historically, stocks do better when Clients need professional advisors who
a lot of demand for all sorts of things, there’s a Democratic administration will provide a calming influence when
we might even expect greater than 4.2% versus Republican. Value stocks do they want to make that potentially awful
GDP growth. terrifically under Democratic admin- decision to bail out of stocks.
istrations. Throw in a Democratically But my big regret is that sometimes
What are the sectors and stocks that controlled Congress — Vice President you can’t talk people out of doing that.
you like for 2021? Kamala Harris will be the tiebreaker — However, this is what makes the stock
We like the financials, such as JPMorgan and that also favors equities — value market. If everyone were bullish like
Chase, [and] consumer discretionary stocks in particular. me, we wouldn’t have opportunities.
retail stocks like Foot Locker and Big We [value investors] want people to
Lots because consumers are going to What’s the biggest threat to the market be pessimistic and compulsive and
start spending much more. this year? overreact because that allows us to do
With regard to the continuing focus Not getting the pandemic under con- what we do.
on home, people are going to buy trol in the time frame the market is
more [merchandise] online and have anticipating. If we can’t do that, then Jane Wollman Rusoff is a contributing
it shipped to them. The pandemic has the economy won’t grow as fast and editor who specializes in interviews with
accelerated a lot of such trends that earnings won’t be [very] good. This will thought leaders. An author and prolific
might have taken 10 years to happen — mushroom to create a headwind for the journalist, Jane is founder of www.
and these trends will continue. stock market. FamilyStarProductions.com.

MARCH 2021 INVESTMENT ADVISOR 19