The stock market's slide is adjusting some stocks that were overvalued, but the overall trend still favors investing in equities, according to portfolio managers from Bankers Trust's global investment management unit.
At a meeting shortly after this morning's opening bell, CIO Bluford Putnam said BT is still bullish on the equity market and plans to remain overweighted in equities and underweighted in bonds.
The market has split into two tiers - the stronger S&P 100 stocks, and the technology-driven aggressive growth stocks, which are leading the correction, said Vice President James Giblin, large-cap portfolio manager. Large-cap stocks not sharply overvalued will stabilize shortly and recover, while the aggressive stocks - whose valuations are ``astronomical'' compared to their worth - will ``still have a rocky summer ahead of them,'' said Mr. Giblin.
Mr. Putnam expects the market to rise 10% to 12% by year end with volatility around 18%, which is normal. He recommended investors put more money into emerging markets and international equities and high-yield debt but ``don't hide in cash.''