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BERNSTEIN: 5 INVESTMENT THEMES FOR 2012

9 December 2011 by Cullen Roche 3 Comments

David Rosenberg’s former Merrill Lynch colleague, Richard Bernstein, is a bit more bullish on equity markets and the economy in general and offers a bit of a different perspective on how to approach 2012 (see Rosenberg’s outlook here).  You can find his entire rationale and strategy here.

Within this backdrop, some of our favorite investment themes for 2012 include (in no particular order):

  • Overweight of the US equity market, and underweight of emerging markets.
  • Overweight of smaller US stocks, with an eye for smaller, domestically-oriented financials.
  • Underweight commodities and gold for US dollar investors. Overweight for EM currency investors.
  • Positions in treasuries to maintain portfolio diversification.
  • Increasingly avoid alternative assets.
Source: Richard Bernstein Advisors

 

Cullen Roche

Cullen Roche

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Comments
  • Larry

    Cullen, since there are no glaring signs of a U.S. recession, with continued slow growth, would you tend to agree with Bernstein, and tend to hold onto some equities here for the seasonal year-end rally?

    12/09/2011 at 5:24 PM
  • exertia

    Cullen, this sounds more practical than Rosie’s themes. Out of the 2, which one do you agree with more?

    Thanks!

    12/09/2011 at 9:46 PM
  • Larry

    I just found this statement from Cullen in a comment on the Lack of an EU Bazooka: “They have to fix the currency. In doing so you fix not only the sovereign crisis, but also the banking crisis. They don’t seem to understand this. Or if they do they’re just not able to agree on a fix. We could be on the verge of a stunning economic break-down if they don’t do something more than this…. ”
    So my interpretation, Cullen, is that you would be very defensive over the intermediate term, due to the heightened risk of a stunning economic breakdown due to the lack of a solid solution to the EMU crisis. Based on my interpretation, I’m 50% in high-grade bonds, 46% cash, and 4% gold.

    12/10/2011 at 12:29 PM