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Pro Investors' Strategy Session for April

BOSTON ( TheStreet) -- Oliver Pursche, president of Gary Goldberg Financial Services, held his usual weekly team meeting as the first quarter came to a close and laid out the firm's strategy for April. As it turns out, nothing changed much at all.

After all, the Dow Jones Industrial Average notched its best first-quarter performance in more than a decade despite several major headwinds, ranging from a natural disaster that has crippled the world's third-largest economy, the potential for a nuclear disaster, and continued violence in North Africa and the Middle East.

The result of Pursche's recently concluded meeting was that nothing made his team rethink its overall global macro outlook. He says that, through April, the expectation is that the stock market will benefit from low interest rates, an increased demand for soft commodities and energy, and pickup in M&A activity.

April promises to bring a few surprises, though, in the form of corporate earnings results for the first quarter. Alcoa (AA) unofficially kicks off the first-quarter earnings reporting season on April 11. Analysts are optimistic about the first quarter, predicting that earnings of S&P 500 companies rose 12.3% compared to a year ago, according to data collected by Standard & Poor's Capital IQ.

"We're not seeing a major change on the stock side, at least not going into April," Pursche says from his office in Suffern, N.Y. "We're actually surprised at the ongoing strength in the market. With all the activity in earnings, especially in the first half of April, we'll gain a little more clarity and whether shifts are warranted."

Investors historically have booked a winning April. Looking at data for the past 20 years, the S&P 500 has ended the month with gains 15 times at an average of 3.7%. Including the five years when the S&P 500 fell in April -- 2005, 2004, 2002, 2000, and 1993 -- the S&P 500 has an average return of 2% during the month.

Over the past five years, several stocks in the Dow have been better bets than others. For example, American Express (AXP), Caterpillar (CAT) and Intel (INTC - Get Report) were profitable trades for investors in each April of the previous five years. American Express, for example, was the best performer on the Dow in April 2010 and April 2009 with total returns of 10.6% and 74.7%, respectively.

The situation in the Middle East as well as Japan's struggle to bring its compromised nuclear reactors under control remain wild cards, but the market has shown it has been able to shrug off fears and move higher. Robert Auer, manager of the Auer Growth Fund (AUERX), says he wouldn't be surprised to see the market pull back and digest its first-quarter gains early in April.

"The market is having trouble here at this level, so in the very near term, I wouldn't be surprised to see some consolidation," Auer says. "I'm very bullish overall."

Auer, Pursche, and other fund managers across the U.S. spoke with TheStreet about their current strategy and what they expect to do in April. This commentary, as well as a handful of equity picks from each fund manager, are detailed on the following pages.
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