Brian Rogers Touts Diversification, Stocks

In an interview with Consuelo Mack, T.Rowe Price chairman Brian Rogers sounded remarkably even-keel about investing in the markets today. None of his advice was radical. It aimed for reassuring. “The seeds have been sewn,” he said,” for a recovery that will benefit investors.” Rogers also manages T.Rowe’s Equity Income Fund.

A few highlights:

  • Investors should be sensitive to their own liquidity (the cash they have to spend) but also look at the leverage in their portfolios — particularly the balance sheets of any corporate holdings.
  • Diversify by market and by security. (Yes, he says it. “Don’t put all your eggs in one basket.”)
  • He owns quite a lot of financial sector bets and thinks regional banks could be undervalued. (He names SunTrust and some other examples.)
  • The global recovery should mean we’re in a period of several years of good corporate earnings. The weakness he’s worried about are the Federal Budget Deficit (“I can’t quite figure out how we’ll get out of that one.”) and employment in the US and Europe.
  • He expects Central Banks to increase rates over the next few years which could be good for corporate bonds, but won’t be good for long term government bonds.
  • “People ought to be concerned about having too great a percentage of their holdings in risk -free investments.”
  • Solid companies with good dividend yields and a low valuation: Pfizer and Merck, Electric Utilities (Exelon, PPL),  Integrated Oil (which he calls  ” a closet bet on emerging markets” in addition to their strong balance sheets and dividend increases).

Hat tip to Investment Postcards from Cape Town.

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