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Growth Stocks Win in the ‘Bernanke-Locks’ Economy: Bespoke’s Hickey

Breakout

After 7 consecutive positive months stocks are finally getting a much needed break. It's healthy for a market to move in two directions. Selling allows the patient investors to put money to work, usually by taking advantage of the inexperienced and panic stricken.

All of which is true but very easy to forget when you're watching your portfolio get beaten to pulp every day. The smart play isn't being rueful or dumping your portfolio. The men and women who make money in markets year after year are those best able to control their emotions and find opportunities.

Paul Hickey, co-founder of Bespoke Investment Group, is a sharp guy with a keen understanding of market history. In the attached video Hickey says the utility sector and other traditionally slow money sectors are looking like good fast money trading ideas.

"Dividend stocks have been slaughtered, down over 10% from their highs," notes Hickey in the attached video. "You can make a short term case that they should see a bounce here."

The higher yielding stocks would bounce because concerns of yields rising are overblown from where Hickey is sitting. Housing starts remain weak, unemployment isn't shrinking, and inflation doesn't exist.

The FOMC has been entirely consistent on its vow to keep the money printing until either jobs or runaway inflation have been created. Love him or hate him Bernanke has been true to his vow to keep cranking out the money.

Hickey has invented his own term for the combination of no growth despite trillions of ineffectual stimulus: Call it a Bernanke-locks economy.

When the dust settles Hickey suggests sticking with growth names. Consumer Discretionary (XLY), Tech (XLK) and more specifically companies with strong secular growth.

Start making a list of the stocks you wanted to buy on the dip. You're finally getting the chance.

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