October 29, 2010
Barry Ritholtz of FusionIQ and The Big Picture blog has been moving back into stocks, and says a “Don’t Fight The Fed” viewpoint is a big factor in his moves.
“When the Fed comes out and says, ‘Gee, the economy is worse than we expected,’ that things are taking much longer to get back to normal, therefore we want to do another round of quantitative easing, it’s tough for an investor to stand in the way of that,” Ritholtz tells Barron’s. You can’t step in front of a locomotive with your hand out and say ‘halt.’”
Ritholtz says he’s high on telecom stocks or stocks related to the industry, citing attractive valuations and strong dividend yields. He also talks about the one bank stock he owns, and why he’s soured on gold.
He might be right about the proverbial ‘don’t fight the fed’, but if the thing that will move is the stock market, why not play capital appreciation as opposed to dividend yields?!?! Perhaps, he doesn’t really have a strong conviction, after all.