This week’s Alpha Trader podcast features hosts Aaron Task and Stephen Alpher talking with Sam Stovall and Todd Rosenbluth. Sam is chief investment strategist at CFRA, and Todd is CFRA’s head of ETF and mutual fund research.
On the one-year anniversary of the bottom of the market crash, Stovall and Rosenbluth detail the numbers behind how we got to today’s near-euphoric market conditions and where we might go from here.
If you don’t have a perfect market timing tool, you are better buying than you are bailing, says Stovall, summing up the key lesson from the last year.
As for where we might be going, Stovall sees the S&P 500 (SP500) closing 2021 about 9% higher than the current level. As for what might trip that up … On the economic upside front, hotter-than-hoped inflation might force the Fed to tighten sooner than expected. On the economic downside front, keep an eye on the what might be a resurgence of Covid-19. Paris is back in lockdown (though not as severe as the previous ones), and cases are surging in a number of places across Europe.
For those who are worried about the economic downside and that yields indeed might be peaking here, Rosenbluth suggests going back to what worked when yields were falling last year - tech (XLK) and consumer staples (XLP). Stovall seconds this idea, noting the combination of tech and staples is about as close to a free lunch as the financial markets can offer. Going back many years, owning these two sectors has given an investor all of tech’s upside, but with two-thirds of the volatility.
There's plenty more from these two savvy market veterans. Listen to or subscribe to Alpha Trader on these podcast platforms:

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