This could be the ultimate contrarian indicator but when one of the most depressing market watch says this bull has a few months of legs to run, do you listen?
“We’re a believer; we’re celebrating. We think the rally has legs,” explains Gina Sanchez, Roubini’s director of equity and allocation strategy. (She is also a CNBC contributor.)
She tells us that Roubini’s firm currently recommends being overweight equities, playing cyclical areas of the market such as technology. “Also we’d take some tilts into staples and telecom to collect yield. And we’d also be overweight ag and livestock. Generally we’d take advantage of the risk rally.”
She topped off the forecast by adding that investors have months to make money.
Roubini reportedly believes the recent action by the Fed and ECB will continue to make equities an attractive investment over the next few months.
On the flip side, Roubini doesn’t expect the rally to last long, according to the report. He thinks more pain will accompany the equity markets in the second half of 2012. He sees the S&P 500 ending the year at 1300, which would represent a 3.6% decline from current levels.
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