Each issue of TWST, we speak to portfolio managers coming from a variety of perspectives on the market. In each interview, we make sure to ask them what advice they would offer at the present moment for our readers. Here’s what three different portfolio managers had to say:

1. Lee Lahourcade, Vaughn Neslon Investment Management: We would advise, given how volatile the markets are, not to chase the market. We think 2009 is going to be a range-bound market with the S&P likely to trade in a range of 700 to 1,000. We would recommend, as levels get closer to the bottom of that range, that one put more money to work. Today we are about in the mid-point of the range, so building some positions in selected stocks is probably a smart strategy.
2. Ken Salmon, M&I Investment Management Corp.: Our advice to investors would be to have a diversified portfolio that includes exposure to small cap and mid-cap stocks. We’re still in a difficult time with the economy and the stock market, but there are a lot of policy responses around the globe trying to offset the weakness. Whether it’s improving liquidity in the credit markets, whether it’s working with the banks to remove some of the most problematic assets from their balance sheets to free up some capital, whether it’s the federal government and/or state governments coming up with various economic stimulus programs, certainly all that helps. Also, we’ve spent the last six months going down at a tremendous rate and we’re in a period of stabilization right now. Everybody is kind of taking a deep breath and we’re hoping we can move forward from here. We’re long-term optimists, but we’re also taking it one day at a time and seeing how things develop.
3. David Pequet, MPI Investment Managemen: In fixed income, I would stay away from pure Treasuries and money funds. I would keep my portfolio quality high. We like seasoned GNMAs right now that have average lives of four years and yield 3%-3.5%. They are very high quality, good income, short duration…On the municipal side, also stay in short/intermediate durations. Focus on essential service bonds, GOs, water, sewer, electric revs and pre-refunded bonds.

For the complete Investing Strategies report, including a complete interview with each of these portfolio managers and more, click here.

This entry was posted on Wednesday, May 13th, 2009 at 5:34 pm and is filed under General Investing. You can follow any responses to this entry through the RSS 2.0 feed.