Analyst: Stocks best bet for investments
For investors to succeed in today's market, they need to adopt a contrarian point of view, says Ned Riley, CEO of Riley Asset Management and former chief investment officer at Bank of Boston and State Street Bank and now a market commentator on CNBC, Bloomberg News and other media. Whatever the conventional wisdom dictates, the savvy investor will do the opposite.
"Human nature tells us to do something you shouldn't do," he told an audience gathered at the Marriott Sable Oaks in South Portland recently. "If you have the urge to buy real estate because everybody else is, then it's time to sell."
Riley, invited by Bangor Savings Bank to address a group of its wealth management clients and state officials, injected optimism in his assessment of the investment landscape. Referencing a Time magazine article that described skyrocketing unemployment, a real estate depression, banking collapse, health care cost explosion and runaway federal deficit, he noted the article's publication date: 1992.
"Some of you have been through this before," he said. "I've been doing this for 30 years and we'll come out the other end."
Ironically, when the prevailing mood on Wall Street is gloom and doom, there's no better time to buy stocks. Riley said the market is the cheapest he's ever seen, with low stock valuations, especially for technology stocks such as IBM and Microsoft.
"Markets move in cycles of three to five years," he said. "When everybody believes the same thing, it's time to get out of the way of that express train. Nobody is saying equities are the best long-term investment now, but I think they are."
He advised investors to shop for the long haul, that buy-and-hold is still a viable investment strategy.
"The market has returned 10 1/2 for the last 80 years," he said. "I think the next 10 years will do at 10 1/2. That beats Treasuries and gold, among others."
Most Recent
Most Recent
Comments