Tech is an “extremely dynamic” and resilient investment when the economy reopens: Oppenheimer
The market bull John Stoltzfus sees investment opportunities across the board when the profit season is in full swing.
Stoltzfus, Chief Investment Strategist at Oppenheimer Asset Management, thinks trading activity makes a lot more sense than critics think – especially when it comes to 2020’s big winner.
“We see technology as ubiquitous. It serves both the business community and consumers in their private lives,” he told CNBC’s “Trading Nation” on Wednesday. “It’s extremely dynamic right now.”
As an example, Stoltzfus highlights the role of technology in the fight against Covid-19.
“Just keep in mind that everything that has happened has to do with developing vaccines that would not have been possible in the warp-speed era without modern technology,” said Stoltzfus.
He doubts that rising interest rates will dramatically change the technology’s upward momentum this year. Stoltzfus believes that Federal Reserve policies, globalization, and business competition will help keep interest rates at all-time lows.
“It [tech] is a counter-inflationary trend that is welcomed by both businesses and buyers, “said Stoltzfus, who has worked on Wall Street for nearly four decades.
When tech investors licked their wounds in early March, Stoltzfus told Trading Nation that the rollover was an important buying opportunity. Since then, the tech-heavy Nasdaq has risen more than 4%.
Stoltzfus admits that technology is vulnerable to temporary withdrawals. He cites investors’ appetite to rebalance portfolios frequently. However, he believes the technology will be robust given the bullish backdrop and demand that higher ratings warrant.
“Investors are willing to pay more for every dollar of future growth as interest rates are still so close to record lows,” he added. “Analysts have raised their expectations for projected earnings, and for good fundamental reasons.”
Despite his optimism about technology, Stoltzfus believes that it is crucial for long-term investors to be diversified, have a clear time horizon, and be patient.
“It pays to be diversified and to own both value and growth stocks,” said Stoltzfus. “Earnings are improving. Sales are increasing. We have been in favor of a broadly diversified approach to equities since September last year.”
In addition to technology, his favorite S&P 500 groups include consumer staples, financials, and industrials.
“Some of it has to do with the reopening of the economy,” said Stoltzfus. “Others only deal with trends that are both cyclical and mundane in nature, longer term.”
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