Steve Leuthold Increases Allocation to Equities
Bloomberg Businessweek recently reported that Steve Leuthold has increased his equity allocation substantially since July, when his core fund was 46 percent invested. Leuthold currently has 60 percent in stocks and expects the market to hit highs for the year, possibly as soon as late November.
Leuthold said he recently bought stocks of health-care management companies and “we’ve become more enamored with” industrial companies. The investor said he doesn’t like financial shares.
Banks “are going to have continued margin pressures,” Leuthold said. “We really don’t have much in terms of financials. There hasn’t been a great deal of loan demand here and the spreads are not terribly attractive for some banks.”
Leuthold is less bullish about next year:
The investor says he’s pessimistic about the second half of 2011 and believes the S&P 500 may drop as low as 850 or 900. The index rose 0.6 percent to 1,165.15 at 4 p.m. in New York after a worse-than-estimated report on American jobs bolstered speculation that the Fed will enact economic stimulus measures.
“I’m concerned as to what might happen or what might not happen next year in addressing the big gorilla in the room, which is the huge budget deficit,” he said. “You’re going to see trouble by the last half. It’s probably going to be related to increasing concerns about the dollar, increasing concerns about monetary debasement.”