Investors may want to avoid playing favorites; Art Hogan of National Securities said Monday that cyclical stocks and equal growth will produce major advantages as stocks break out.
This year, nothing is going to be binary, said CNBC's Chief Market Strategic, CNBC Trading Nation.
Having a balance between these two and rebalancing every few months puts you in a position to beat the S& P handily. Dow and the S& P 500 are trading in record territory this week.
The Dow soared to close at 4,077. 91, while the S& P 500 climbed 33,527.19 points to 373.98 points, both all-time highs. Nasdaq, the tech benchmark benchmark, also sped up, which also went higher, in 13.705 to 1.7% 59.
We get to a point often times in markets where we think it's either or And, most of 2020 was mostly technology, Hogan said: post-Labor Day, we 've seen this rotation out of the economic sensitive cycle into technological changes. This is not a trade that goes on forever, either. Hogan, who oversees$ 20 billion in assets, released his official S& P 500 year-end forecast of 4,300 on Jan. 4. With the index 5% away, he said Monday that it could come much sooner- especially due to the daily US vaccine doses in the millions.
In the wake of that, comes the hope for better economic activity, and we begin to see that clearly in some of the economic data from March, he added. The March earnings data is clearly proving that the S& P 500 earnings estimates are likely conservative.
His thesis is that an explosion of economic activity will put inflation fears in control due to the bullish effects it will have on corporate earnings across the board. According to Hogan, it will contribute to healthy, broad market upside.
His top game is financials on the cyclical or economically sensitive side. Hogan speculated it could be the best S& P group in 2021.
Financials are obviously very dependent on GDP growth; we 'll see a lot more of this in the future, said Hogan, who also sees key benefits from rising interest rates. To play a growing market on the growth side, he named semiconductors as his top spot.
There's going to be a very long journey for us to get back to producing the number of semis we need and that number grows every day, Hogan said. We have seen a shortage of semiconductor chips affecting all kinds of industries including automobile manufacturers.
They are very cyclical, but they have a great growth component to them.