What Income Investors Should Do Now

Markets ETF Trends

Note: This article is courtesy of Iris.xyz

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By Pam Krueger

Stock prices at record highs and interest rates at historic lows make it a tough environment to invest for income.

So I asked three seasoned investment advisers who’ve managed money in good and bad markets what advice they’re giving clients for this zero-interest rate world. Here’s what they told me:

Joe McNay: Growth Stocks and Tech Stocks

Joe McNay, founder and chief investment officer at Essex Investment Management in Boston, has been picking stocks for more than 40 years. In addition to his firm’s individual private clients, he has portfolio management responsibilities for a variety of funds. McNay says his clients are currently worrying most about the stock market’s valuations; the condition of the economy and the chance that the Fed will raise short-term rates, which could spook the stock market.

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McNay sees his clients wanting to do the opposite of what he thinks they should be doing. They don’t want to own growth stocks. Instead, he sees them reaching for yield in dividend stocks.

But he’s recommending dynamic growth stocks and companies that will be beneficiaries of rising rates. His favorite sector: specialized banks. He also likes growth in biotech companies, whose stock prices have been hit by political forces, and internet/cyber-security stocks.

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