This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
$1 buys you full access to ALL of TheStreet's Subscription Services! Learn More

'RealMoney' Radio Recap: Playing the Pullback

It looks like everything is working in this market -- momentum and contrarian plays, big-cap and small-cap stocks -- but Aaron Task, co-executive editor at TheStreet.com told "RealMoney" radio show listeners on Wednesday that it's time to start thinking hard before chasing the market.

In this environment, fund managers will feel performance anxiety if they stayed out of stocks, Task said, because they're way behind their benchmarks if they're sitting on cash.

It's now even harder to figure out where and when to get into the game now that everything has performed so well. And managers who aren't in big plays look like they've already missed out.

For example, mutual fund managers who didn't get in on Apple (AAPL) in 2005 and who stayed out because they were waiting for a pullback are starting to feel the heat.

They start to worry because they want to preserve their raises, bonuses and even their jobs, so they feel compelled to chase the market.

But as individual investors, we need to resist that temptation, said Task, because there will be a pullback, and that's when to get in.

For example, cyclicals including DuPont (DD) issued a warning, and there has been negative news from Alcoa (AA) and Phelps Dodge (PD).

Combined with lower prices from automakers and a slowing housing market, these signs show that some market segments will weaken, he added.

Waiting for Cyclicals

Brian Belski, senior equity investment strategist at Merrill Lynch, told Task that the influx of hedge funds and commodities funds has added to the performance anxiety for traditional portfolio managers.

It's better for the investor because it means more diversification and more choice, but it means more competition for the equity manager, Belski said.

Belski discussed a recent Merrill Lynch report that said cyclical sectors including materials companies should see a move higher over the long term, thanks to factors like falling fuel prices.

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,810.06 +91.06 0.51%
S&P 500 2,063.50 +10.75 0.52%
NASDAQ 4,712.97 +11.1030 0.24%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs