The stock bull market run is not over yet. So says Barry Ritholtz, the CEO and director of equity research at Fusion IQ and the creator of the very popular Big Picture blog. This is despite the stock market falling on four of the past five days as some warn of a once-again slowing global economy.
Ritholtz told Yahoo’s Daily Ticker, “This bull run will eventually end. . .[and] the best way to handle that is to wait for the market to tell you the run is over. When you have a market up as torridly as this one has been since QE4 was announced, you have to think that there will be a little bit of a slowdown. You can’t grow 13% a quarter for very long.”
But the indicators Ritholtz studies tell him the bull run is not yet finished. He says the internal market dynamics are somewhere in the middle: “we’re not excessively bullish; we’re not excessively bearish.” One bullish indicator is the high cash balances in individual investors’ accounts. But a bearish indicator is the high bull/bear ratio, a key gauge of market sentiment.
There are several sectors that Ritholtz favors currently. These include: companies that pay steady dividends, value stocks instead of growth stocks, and healthcare and consumer staples stocks. He gave a key reason for liking the healthcare sector: “Seventy thousand baby boomers retire every day. They’re huge consumers of biotech, pharmaceuticals, healthcare and hospital care.”
But Ritholtz does remind investors, “There are opportunities, but make sure you’re not overpaying.”
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