Bruce McCain, chief investment strategist for Key Bank, was in town this week to speak with clients, and he offered The News Tribune a few slices of insight for investors.
“We’ve been telling people times are good. They’re not great,” he said.
Best of all, he said, “There is no sign of an upcoming recession.”
Beyond our shores, he said, “Europe is not on the edge of collapse.”
As you may recall, Europe was recently on the edge of collapse, what with Greece nearly withdrawing from the euro. Add problems with Ireland, Italy and the Iberian Peninsula.
“Spain actually grew last quarter,” McCain said.
And where should people be looking to invest?
"The odds are favorable that you will make more money in equities than in bonds or cash,” he said. “Over the next 12 months – probably for the next couple of years – we could see continued expansion, but it may not feel like great expansion.”
Look for growth closer to 2 to 2.5 percent than to 3.5 to 4 percent, he said.
He sees growth in emerging markets, and domestically "in a market where the economy is expanding, smaller caps often do better.”
He likes Starbucks (SBUX) for its overseas growth possibilities; United Technologies (UTX); Eaton Corp. (ETN); Qualcomm (QCOM); Johnson Controls (JCI): Google (GOOG); and Apple (AAPL). And maybe Amazon (AMZN), but "you have to believe the expansion will result in real profits."
For investing in emerging markets, which he favors, he advised seeking an “actively managed fund,” with an eye toward South Korea and Taiwan rather than, say, China and India.
“Most investors want to play defense,” he said. “You need to have some good offensive maneuvers. The point is to be taking reasonable risks, disciplined risks. If you’re talking about money that is there for the long term, there is little better than equities.”
And with the S&P touching a handful of all-time highs this month (it closed at 1763.31, down 8.64 on Wednesday), McCain speculated that it could hit 1,800 by year’s end.