BOSTON (TheStreet) -- Individual investors are increasingly fearful as they grapple with wild swings in the stock market. Professional investors, on the other hand, say there are plenty of value stocks for those who can stomach the risk.
The Dow Jones Industrial Average has swung wildly this month, rising and falling by more than 420 points in five out of nine trading sessions. But with many stocks trading at only 11 times earnings in a near-zero interest-rate environment, professional investors are turning greedy while the majority have become fearful.
Brian Frank, manager of the Frank Value Fund (FRNKX), says the valuation of his portfolio was the cheapest ever heading into second-quarter earnings, and that includes 2008 and 2009 when share prices plummeted during the heart of the deep recession. "Guess what? Now it's even cheaper," he says. "The fundamentals are still getting stronger, even if there is economic weakness in the future."
While mom-and-pop investors succumb to panic and euphoria on alternating days, worried about the risk of holding stocks over the weekend after two days of gains for equities, Frank and other professional money managers are snapping up shares."It's a summer sale. Everything is a lot cheaper and there are fantastic opportunities," says Philip Tasho, chief investment officer of TAMRO Capital Partners. "You want to buy the best when they're depressed. You have a lot of companies falling with the whole market coming down. With everything on sale, it's a great time for an individual investor to pick up the pace and buy some high-quality companies." "When the market goes down 5%, people on CNBC start screaming and people call their broker to sell at any price. This is the time we go to work. This is when we take advantage," Frank says. "Whether or not someone wants to pay $45 for my stock today and then $40 on Monday because there were some fears over the weekend, that doesn't affect me. That's just what the crowd thinks about it over the next few days. It doesn't affect the fundamentals.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
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.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
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.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV