With Wall Street stuck in the depths of a bear market, some investors are wondering if it’s time to flee stocks and hide in cash. But market veteran Nancy Tengler is unequivocal that investors should strap in for the long haul. “Bear markets aren’t fun. But we do know that every bear market is eventually followed by a bull market and the trick is not to let market volatility put you off stocks,” Tengler, CEO and chief investment officer of Laffer Tengler Investments, wrote in a note on Oct. 11. She believes investors should seize the opportunity to put money into the “highest quality names” amid the current market weakness. “I’m not saying the market can’t go lower. I think it can. But typically, when you look back on periods like this, it’s always been a good time to deploy capital in a very disciplined way. Hurry, but just like you’re investing in your 401K — a little bit now and a little bit later. You’re just buying the highest quality names, many of which are on sale right now,” she told CNBC Street Signs Asia on Thursday. Tengler, a proponent of dividend growth strategies for more than three decades, believes this is a “great time” to own companies that increase their dividends in a sustainable way. Her company uses what is known as a relative dividend yield (RDY) strategy to assess a stock’s value. A high relative dividend yield is a buy signal if the dividend level is expected to be maintained and increased over time. “RDY is unique in that the relative nature of the RDY metric allows us to invest in fallen angel growth companies committed to growing dividends as part of sustainable long-term earnings growth,” explains Tengler. “The great thing is we get paid to wait for the fundamentals to improve in these companies with the potential to grow faster than average value stocks.” Stock Picks One of her top picks is Amazon — a stock she thinks investors should own for its cloud business. Tengler said the US tech giant is expanding its cloud segment at a rapid pace, while the company has also been able to increase its advertising rates. She acknowledged there could be some short-term volatility for the stock given competition from Target and Walmart, but said it could provide opportunities for investors to build a position in Amazon over the longer term. Tengler believes the broader technology sector will benefit from expected higher software spending, with Microsoft likely to be the biggest beneficiary. “I think there are a lot of opportunities to responsibly snatch some of these names. Don’t chase them, but keep in mind that the future and reliability of their earnings growth is very powerful. And that’s going to be interesting now we’re going into a recession and earnings growth is slowing,” she said. Read more Is Meta a stock to buy or avoid? Two tech investors face each other The EV technology market is picking up — and now’s a good time to cash in on these stocks, says Citi Goldman Sachs prefers Tesla and another major automaker, even during an economic slowdown . Tengler also likes Home Depot, which she described as “very reliable” and with a growing dividend that currently stands at 2.7%. “If you can get 17% annualized dividend growth like Home Depot has produced for the past five years, that’s a pretty good hedge against inflation. You’re being paid to wait for things to change,” she said. Rounding out her list is Illinois-based biopharmaceutical company AbbVie. The company has a dividend yield of about 4% and annual dividend growth of 17% over the past five years, Tengler said. “It [belongs to] a defensive sector that can act as a bar against some of the riskier elements of your portfolio, such as consumer discretionary and technology, which we think it’s time to add those two sectors back in. [AbbVie] offers a balance against that volatility,” she said.
#Dont #put #volatility #Market #veteran #reveals #buy