Lewis Altfest’s time in a financial attention spans 7 decades. He has some difference of recommendation for investors who aren’t used to stomach-churning stock-price moves.
He founded Altfest Personal Wealth Management in 1983 after operative as a ubiquitous partner and executive of investigate Lord Abbett Co. Before that, he was an researcher for several firms, including Lehman Brothers.
Below, Altfest modifies his methodology for a shade of division holds to assistance investors continue violent markets.
From his nation getaway, Altfest, whose organisation manages about $1.5 billion for private clients, had a following recommendation for long-term investors who might have problem watchful by a bear marketplace for improved times ahead: “Bears come adult to a behind rug looking for food. We are not fearful of them. We strike on a behind window and they run away. My recommendation for immature people is don’t be fearful of a bear marketplace for stocks! It might take time for a bear to run away, though it always happens.”
When asked about a concerns of his clients this year, Altfest pronounced many “have not strike a panic mode yet,” and that it is typically newer clients who are a many shaken about a stream environment, in that rising seductiveness rates have pressured batch and bond valuations.
He remarkable that by building money balances and holding shorter-term holds late in 2021, he was positioned to take advantage of cost declines this year.
He said: “We have stayed divided from volatility,” that is reflected in a stock-screening methodology below.
When asked for an instance of an investment that has hold adult good this year, Altfest named a Lazard Global Listed Infrastructure Fund
Here is how it has achieved by Jun 28, with a SP 500
combined for anxiety (with dividends reinvested for both):
Altfest pronounced that for a prolonged term, he and his colleagues were meddlesome in biotechnology, “which has been strike and has a flushed future,” and general allocation, “developing markets in particular.” He mentioned a iShares Biotechnology ETF
and a Matthews Asia Innovators Fund
as dual extended vehicles he and his group of investment managers have been regulating for extended bearing to those areas of a market.
Screening U.S. division stocks
Back in January, Altfest pronounced investors were “buying high.” The SP 500 began a year during a brazen price-to-earnings ratio of 21.5 — a U.S. benchmark index’s brazen P/E has declined 24% to 16.4 given then.
For many of Altfest’s clients, income is a primary objective. Over new years, this has led to a concentration on holds with appealing division yields. Even with this year’s rising seductiveness rates, a produce on 10-year U.S. Treasury notes
is 3.17%, that isn’t really appealing given holds miss stocks’ long-term expansion potential.
With batch prices carrying depressed so most and with a weakening economy in mind, Altfest done some changes to his endorsed initial screening criteria for division stocks. He now suggests commencement with a division produce of during slightest 3.5% (up from his prior 3%), with estimates for augmenting sales and gain by 3% to 4% (down from his prior operation of 4% to 5%).
He also wants to hang with a low-volatility strategy, with a beta of 1 or less. Beta is a magnitude of cost sensitivity over time. For this screen, a beta of reduction than 1 indicates a stock’s cost has been reduction flighty than a SP 500 over a past year.
Here’s how we screened a SP 500 for peculiarity division stocks:
- Beta for a past 12 months of 1 or less, when compared with a cost transformation of a whole index: 324 companies.
- Dividend produce of during slightest 3.5%: 64 companies.
- Estimated gain per share for 2024 augmenting during slightest 4% from 2023, formed on accord estimates of analysts polled by FactSet. Altfest suggested going out this distant given it would equivocate a exaggeration of current-year estimates from tangible EPS results. This brought a list down to 45 companies.
- Estimated sales for 2024 augmenting during slightest 4% from 2023, formed on accord estimates of analysts polled by FactSet. The estimates for gain and sales were formed on calendar years, not companies’ mercantile years, that mostly don’t compare a calendar. This final filter narrowed a list to 19 stocks.
Here they are, sorted by division yield:
Expected boost in EPS – 2024
Expected boost in sales – 2024
Vornado Realty Trust
Philip Morris International Inc.
Walgreens Boots Alliance Inc.
International Business Machines Corp.
Pinnacle West Capital Corp.
Federal Realty Investment Trust
Realty Income Corp.
Truist Financial Corp.
Kimco Realty Corp.
Darden Restaurants Inc.
Principal Financial Group Inc.
Cardinal Health Inc.
Digital Realty Trust Inc.
Click on a tickers to start your possess investigate about any of a companies.
Click here for Tomi Kilgore’s minute beam to a resources of information for giveaway on a MarketWatch quote page.
A batch shade formed on a singular series of factors usually serves as a starting indicate for serve research. If we are meddlesome in any of a batch on a list, we should learn some-more on your possess about companies’ businesses and long-term prospects, to form your possess opinion.
More mid-year coverage:
- What’s subsequent for a batch marketplace after a misfortune 1st half given 1970? Here’s a history.
- Stagflation, reflation, soothing alighting or a unemployment — what Wall Street expects in a second half of 2022
- Stock marketplace set for misfortune half-year opening given 1932. Recession hazard will foreordain second half: Deutsche Bank
- Major bond ETFs on gait for misfortune initial half to a year on record