Officially, we still have 30 trading days left in 2013. A year that is already headed into the history books for its outsized performance, and utter defiance in the face of numerous market threats that have failed to stem its record run.
For those who have waited patiently on the sidelines for a dip that was worth buying, stocks have barely cooperated, and instead have delivered a frustrating string of three dozen record-high closes.
If you're amongst the restless investors who are waiting for your moment, at least one veteran money manager says you're not likely to get your chance, at least before the New Year.
"Investors don't know what they want or what to do," says Dan Veru, the CIO at Palisade Capital Management in the attached video. "We had a client say once, 'I don't like the market here, I'll wait until it's higher,'" he jokes of the angst felt by millions of people who are wrestling with the thought of diving into the market when it's at an all-time high.
For the record, Veru expects stocks will grind higher by another 3 to 5 percent in the waning weeks of the year, barring any unforeseen catastrophes, due to the huge amount of cash that continues to come out of bonds but has yet to migrate into equities. As a result, he thinks investors should buy the top today, and gives two reasons to support his thinking.
1) Rising Rates = Improving Economy: Buy Cyclicals
"We are in an environment now where interest rates are slowly rising, which is a good thing in my opinion, because they're rising because the economy is gradually gaining strength," he says. To play that theme, Veru says investors should be in cyclical sectors (the XLY, for example) that are leveraged to the recovery.
"You definitely don't want to be a bond investor," he says. "Compared to stock market returns, bonds are like a party that you weren't invited to."
2) Rising Rates Will Benefit Banks: Buy Financials
At the same time, this New Jersey based money manager who oversees more than $5 billion in investable assets cites a second rate-based theme that he thinks will be a market leader for the fourth quarter.
"Secondly, you want to focus on the financials (XLF)," he advises, noting that "As the yield curve continues to steepen, these (banks, brokers, asset managers, and insurers) are going to benefit tremendously from that activity."
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