This is the place to speculate your cash in 2022, CNBC’s prime advisors say
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Mark Mirsberger, CEO of Dana Investment Advisors
Rank on the FA 100 list: 1
Source: Dana Investment Advisors
“We do not see rising inflation as entirely temporary and are therefore positioning the portfolios accordingly,” said Mirsberger of Dana Investment Advisors. “This also includes the concentration on floating and floating rate bonds.
“FAANG and other soaring tech stocks have fueled the major indices for the past few years and benefited from the pandemic,” added Mirsberger, referring to Facebook, Amazon, Apple, Netflix and Alphabet (formerly known as Google). “While we believe technology is much stronger than it was in 2000, we believe value strategies will pay off with good growth rates.
“We also believe that investors will continue to appreciate ESG [environmental and social governance] invest, and that the SEC will help improve disclosure. “
Harlan Cadinha, Chairman and Chief Strategist of Cadinha & Co.
Rank on the FA 100 list: 90
“A post-pandemic rebound should be seen in consumer stocks: airlines, restaurants, hotels and resorts should see strong relative gains compared to the bottom-line earnings caused by Covid,” said Cadinha of Cadinha & Co.
“Government intervention, such as drug price controls, which is a target of the proposed Biden legislation, will lower the profit growth rates of the affected companies,” he added. “Government intervention could also hit companies like Google, Facebook, Twitter and Apple.”
He said the company is currently 47% invested in stocks, 8% in short-term government bonds, and the rest in cash.
“Most of the cash in the portfolios is bond money that we are keeping out of bonds because of our current negative attitudes towards bonds,” said Cadinha.
Michael Bisaro, President of the StraightLine Group
Rank on the FA 100 list: 92
“The post-pandemic timeframe will be marked by rising interest rates, higher inflation and ongoing challenges in various supply chains around the world,” said Bisaro of the StraightLine Group. “Larger companies are more likely to outperform smaller ones because the larger the scale, the fewer problems with securing their inventory.
“While we are generally positive about the outlook for most equity markets, we are concerned about bonds,” he added.
“The headwinds generated by low and slowly rising interest rates will likely lead to a time when much of the bond market will generate negative real returns relative to inflation.”
Eric Leve, Chief Investment Officer at Bailard
Rank on the FA 100 list: 97
“The rise in energy prices in 2021 was exceptional,” said Leve von Bailard. “This was a combination of Covid and post-Covid-related excess demand, strong OPEC + discipline and ongoing disruption from Hurricane Ida.
“With demand normalizing in 2022 and increased oil and gas production, the sector’s profits could come under pressure in 2022,” he added. “Our tendency would be to sell this year’s rally.”
On the flip side, Leve said, “Luxury goods have done well during the pandemic and we expect to do so again next year.”
“Chinese consumers are vital to European consumer goods manufacturers, and half of China’s purchases are made while traveling,” he added. “As soon as China allows outbound travel again, we expect these pent-up expenses to give these companies a tailwind.”
Kent Kramer, Foster Group’s Chief Investment Officer
Rank on the FA 100 list: 96
“We are still unclear what the economic point of cryptocurrency really is and what long-term viability these assets have,” said Kramer of the Foster Group.
“There is a high likelihood that governments will lag behind the curve in regulating these new assets, and future regulations, along with government-sponsored digital currencies, are likely to change the landscape significantly.”