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5 Stock Strategies To Play A 2019 Market Rebound

Jim Paulsen, the widely respected chief investment strategist of Leuthold Group, forecasts there will be a sharp market rebound during all of 2019, per Business Insider. He recommends five core strategies for investors who want to take advantage of the rally, including buying materials, energy and industrial stocks as they benefit from a weaker dollar, as well as financial stocks amid an expected slow down in Fed tightening. To play on the continuation of a strong U.S. economy, Paulsen highlights small cap stocks. He also favors international equities, which he argues are cheaper and growing faster than their U.S. counterparts. Outside of the pricey FAANGs, the investor views less popular tech stocks as well positioned to outperform.

“Small-cap tech stocks have been matching the performance of their larger brethren, many without facing the thorny and unresolved issues which currently challenge the FAANGs,” says Paulsen. The market vet is more optimistic than many regarding whether the five-day bull rally through Thursday of this week will continue.


Paulsen’s 5 Bull Market Strategies: What To Buy


‘Recession Avoided in Foreseeable Future’


Taking Advantage of the Rally

As for beaten down tech stocks, the investor says FAANGs remain overly popular, recommending a portfolio overweight in tech but focused on smaller caps. Paulsen isn’t the only market watcher favoring smaller cap tech stocks. Per an earlier Investopedia story, analysts and investors are leaning into younger tech companies like Twilio Inc. (TWLO), Etsy Inc. (ETSY), Roku Inc. (ROKU) and Square Inc. (SQ), which have all sharply outperformed the market in 2019. 

Paulsen likes small caps in general, forecasting “greater upside leverage to a period of renewed optimism” after they underperformed in 2018. 

Meanwhile, a weakened US dollar should raise commodity prices and improve the competitiveness of US industrial activities, making shares of materials, energy and industrial sectors attractive bets.  

Paulsen views international developed and emerging stock markets as presenting a better relative value than domestic plays, suggesting that they are under-owned in most portfolios.

“While US economic growth may be slowing, growth may already be accelerating again abroad. And finally, a weak US dollar would augment foreign investment returns,” he stated.


Looking Ahead

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About Amy Harvey

Amy R. Harvey writes forStartUps Sections In AmericaRichest.

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