Hightower’s Stephanie Link expects economic growth to remain above trend next year and recommends diversifying into companies that could benefit from the pent-up demand for maximum returns in 2022.
Highlights from Link’s interview on CNBC’s ‘Squawk Box’
Link referred to data from the Transportation Security Administration (TSA) that screened 6.4 million people over the weekend to make a bullish case for travel and leisure on pent-up demand. On CNBC’s “Squawk Box”, she said:
I think the consumer is in very good shape, given wages, given jobs, even the savings rate, although it’s come down, it’s pretty elevated. So, I think that’s one part of the portfolio you want to have exposure. That’s financials, industrials, energy, materials, that’s travel and leisure.
She expects economic growth to slow down a little in 2022 compared to this year but is confident it will remain above trend at close to 4.0%. A day earlier, Strategic Wealth Partners’ Mark Tepper said it was time to switch to the “defensive growth names”.
Invest in growth at a reasonable price
According to Link, investors should look for “growth at a reasonable price”. Instead of picking the high flyers that have already had their run, she recommends diversifying into the total addressable market stories. She added:
That’s secular growth; that’s artificial intelligence, electric vehicles, cloud. Listen to what Micron said yesterday, these areas are driving better than expected results for Micron. These companies have end markets that are growing substantially, not just this year but over the next several years.
Last night, Micron reported market-beating results for its fiscal first quarter and gave strong guidance for the future. Link doesn’t own Micron but sees promising upside in Cisco Systems Inc on top of an over 30% gain this year.
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