Investors have to wonder over the course of this year of economic and political surprises whether the stock market will finish with a roar or with a whimper.
Since anything seems feasible, the predictions of experts run the gamut. The only consensus is that this is not a good time to pay too much for anything.
"If I were a betting man, I'd wager that a relatively weak summer for the market will give way to a decent yearend 2011 rally," said
Stay the course in the stock market through year's end rather than trying to play any sort of market-timing game, advised Buckingham. He considers stocks reasonably priced in light of a low-interest-rate environment and strong corporate balance sheets.
"The investor should keep buying cheap in the second half of 2011, since the cheaper the stock, the lower the risk," said
He is wary of high-priced growth stocks such as
"Even markets in a long-run bull have moments that are interrupted," cautioned Jacobs. "I see bipolar market tendencies through yearend."
Even optimistic experts have some caveats.
"Based on the stock fundamentals and valuations, my outlook is still fairly positive for gains in the second half of 2011," said
The investment story of emerging markets remains a good one in terms of growth, though they will be pressured by food and energy price increases, Fitzpatrick added. Defensive areas such as health care and industrial stocks make sense for the rest of this year because of a shift underway to more conservative areas.
"As always, we seek undervalued stocks trading for inexpensive multiples to their sales, earnings and book value, and we award a premium for those with generous dividends," explained Buckingham. "While we do not discriminate based on company size, we favor large-cap stocks these days." He considers these stocks ripe for the picking for the remainder of 2011:
Meanwhile, Jacobs' choices reflect his view that health care and for-profit education stocks are underpriced:
Selecting value stocks that benefit from current circumstances is a prudent way to get through the rest of this year and into 2012. No one believes the overall market and economy possess the power to boost all stocks.
"I do think that 2011 is setting us up for a good start to 2012," concluded Fitzpatrick. "The strength in the corporate sector, the likelihood that the Fed won't raise rates and the election year should all be generally positive for stocks."<
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