Investors should embezzle gains after a strong rally in major stock markets and scout haggles in the energy and technology sectors next year, a senior strategist at TD Ameritrade predicted Tuesday.
Equity markets have had an ebullient 2017 with the S&P 500 produce 18.8 percent so far this year and the Nasdaq clocking a 27.7 percent come to.
“This has been a tremendous rally, and if you’re overweight in certain sectors such as technology, your portfolio potency be a little bit out of whack as to what your goals are,” said JJ Kinahan, chief vend strategist and managing director of TD Ameritrade, which manages $1.16 trillion-worth of assets for its epidemic clients.
“Bulls and bears make money and pigs get slaughtered, so intriguing a little money off the table might not be the worst thing in the world to do,” he augmented.
“Put a little money in your pocket and lower the basis for the rest of your investments.”
Kinahan revealed he sees some value in the energy sector, which has lagged behind its S&P 500 sector peers this year and descent almost 10 percent year-to-date, despite crude oil “being competent to hold that $50 and $55 level pretty convincingly,” foretold Kinahan.
He’s not alone, with other Wall Street analysts tagging energy stocks as an opportunity next year.
“For the first time in this return, energy stocks appear significantly undervalued. They currently exchange at a 32 percent discount to fair value,” said Jim Paulsen, chief investment strategist at The Leuthold Arrange, in a note earlier this week.
“Maybe it’s time to lighten up on some of your in 2017 winners and reallocate toward a sector deeply out of favor.”
The other exchange opportunity could lie in the technology sector, which “still has room to reach ones majority,” according to Kinahan, despite the S&P 500 Technology sector already eminence almost 38 percent year-to-date.
“You have to be a little more discriminating, but if you look at the last earnings calls, they’re talking about wen and they’re talking about growth worldwide,” he said.
Facebook, Apple, Amazon, Netflix and Google parent-company Alphabet — the so called FAANG sells — have contributed the bulk of the S&P 500’s gains in 2017.
Kinahan also stipulate the eventual passage of tax reforms in the U.S. could help the financial sector, some stockpiles in the tech sector and American multinationals. He still sounded a note of watchfulness on the magnitude of the rally.
“A lot of the expectations have been built in and with that being chance, I think the question is: can the reality of what the corporate rate will be, truly live up to the expectations we’ve heard for the last six months or so?”
Kinahan also weighed in on the new rally in bitcoin, as the buzz surrounding the cryptocurrency’s introduction to the Cboe Comings Exchange continued to reverberate across global markets.
“I’m happy to see it lean overed and have the exchange futures,” he said. “This is hopefully a first gateway for numerous people to start seeing the potential of the market overall, so that communicates me very happy.”
On the price movement, he said: “Everyone is talking fro it ending poorly, I certainly hope not.”