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
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Is It Time to Go All-In on Stocks?

Stocks in this article: BLK BRK.A

NEW YORK ( TheStreet) -- BlackRock (BLK) CEO Larry Fink thinks investors should invest 100% of their portfolio in stocks. This, after the S&P 500 gained nearly 7% in the first six weeks of the year.

Fink's argument, which he made during an interview with Bloomberg TV, is based on the idea that stocks should outperform bonds in the backdrop of an easy-money policy. Add to that valuations that are at 20- or 30-year lows, and you have a recipe for solid stock returns.

Larry Fink, CEO of BlackRock

Chris Konstantinos, portfolio manager at Riverfront Investment Group, likens it to the 1990s when the opposite scenario was true -- stocks were overvalued and bonds were undervalued. Investors have to decide how much they are willing to pay for overvalued bonds now.

With cash accounts yielding returns of zero, and the 10-year Treasury yielding 2% and inflation at about 2%, investors should be considering other investment vehicles. Bill Stone, chief investment strategist at PNC Wealth Management, calls it and era of financial repression. He explains it's hard to get ahead leaving money in savings accounts and bonds unless the world falls apart.

Fink, who co-founded BlackRock in the 1980s primarily as a fixed-income manager, goes on to back up his equities strategy by explaining: "I don't have a view that the world's going to fall apart. So you need to take on more risk."

The problem with taking on more risk is the issue of volatility. Stone expects 2012 to be a volatile year and would recommend diversifying a bit to help offset those swings, but overall he views stocks as an investment that will provide solid returns this year.

Even Nouriel Roubini, the economist and NYU professor sometimes known as Dr. Doom, is turning bullish on stocks. According to an interview with CNBC, Gina Sanchez, who is the director of equities at Roubini Global Economics, says Dr. Doom likes cyclical stocks, such as those in the technology sector. He is even looking to staples and telecom stocks for their high yields. But be sure that Roubini's view includes an end to the party in the second half of the year as global markets remain a risk.

Most managers would recommend a more practical strategy of diversifying your portfolio 60% to stocks and 40% to bonds in a normal environment, maybe now is the time to tip it a little more towards equities to achieve better returns.

>To contact the writer of this article, click here: Lindsey Bell.

>To follow Lindsey Bell on Twitter, go to http://twitter.com/lindseycbell.

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!

Markets

DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

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