Nervous investors with plenty of cash should ‘step up’ and buy stocks as no big downside lies ahead, chief equity strategist at $1 trillion firm says

  • Robert Doll, Nuveen chief equity strategist, told Bloomberg that investors who have cash right now have to “step up and put some in” the market.
  • The strategist said there will be “bumps on the road” in the short term, but he doesn’t see a large downside ahead and thinks the economy will be better a year from now.
  • He suggested investors seek companies with interesting products, good management practices, and a “bunch of cash.”

Robert Doll, Nuveen chief equity strategist, told Bloomberg on Tuesday that those who are nervous to enter the market right now should step up and invest if they have a lot of cash on hand.

The strategist of the $US1 trillion firm said this with the caveat that there will be “bumps on the road in the short term.” Earnings are “nowhere near where they were when stocks were at an all time high in February” and “valuation levels are not particularly cheap.” Pair this with the uncertainty around the election and pending stimulus bill and there’s a case that “we’re a little ahead of ourselves in the short term,” said Doll.

But he also said that he doesn’t “see big downside” to markets and that he thinks the economy will most likely be better off next year.

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“Those who are a little nervous, if you have a ton of cash, you gotta step up and put some in, in my view. If you’ve been fully invested the whole way and want to take a profit or two, I’m fine with that as well. Markets don’t go straight up,” Doll said.

Doll told Bloomberg that investors should look for companies that have interesting products, manage their business well, and generate “a bunch of cash.”

“If you can find companies that do those three things rather consistently, generally you’ll be in good shape holding those stocks,” the strategist said. He also suggested to seek out companies that aren’t “ridiculously valued.”

Home Depot, he said, is up considerably now but still not “horribly expensive.” The home improvement retail giant has gained 30% in 2020 and opened at $US284.40 a share on Tuesday.