The overall market has sustained its bounce off the lows, continuing to trend higher amid peace talk developments between Russia and Ukraine. Hightower Advisors still believes in the importance of this market. Stephanie LinkInvestors are warned that the market environment may not seem as stable as it appears.
Link said Tuesday on Benzinga’s YouTube channel that even if we reach a solution on the war front, there’s still inflation in the economy. And we have a Fed which is behind the curve.”Pre-Market Prep.”
Despite recent strength in the market, it is still down for the year. Several stocks have seen multiple contractions, she said. The market was trading around 21 times earnings at the beginning of the year, but has since moved down to around 18 times earnings, she said.
Link stated that the historic average, which depends on rates, is approximately 16 times. Therefore, he believes we will be in a choppy environment for medium term.
Link Adds To Tech Holdings:Link said that while lower interest rates are a favorable option for risk-on assets and investors may see multiples contract more as rates rise.
She told Benzinga that she has been adding to tech stocks as multiples fall, which helps balance her cyclical-heavy portfolio.
She pointed out that she had been buying Fortinet Inc(NASDAQ:FTNT) On weakness
“I believe cybersecurity is a great total market story. Link said that this company has done an excellent job in terms executing and building out their products. We know this theme is going to be around forever and that stock dropped as much as 16% in the year-to-date.
Link on Long-Term Investing For younger investors with longer-term investing horizons, Link recommends diversifying investments among industry leaders.
“I look for big blue-chip firms, No. 1 or No. 2 in their industries and a very good CEO and a bench … I place a lot of credibility in management teams,” Link said.
Link is familiar with the management teams of each stock she holds in her portfolio, she said: “I wouldn’t invest in a company if I didn’t do a lot of homework.”
After assessing management, she looks for solid balance sheets with free cash flow, as well as potential catalysts. Link focuses on companies that have both earnings and sustainable growth, she explained.
Check out the complete interview here
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