“Please, God, get me back to even and I’ll never buy stocks again.” To give some insight on both the market’s direction and stock picks that will work right here and now, Breakout welcomed the fearless Jay Pestrichelli, co-author of the book “Buy and Hedge: The 5 Iron Rules for Investing Over the Long Term.” Pestrichelli starts with a message sure to assuage those looking to press their bullish luck. “I think we go higher here for the rest of the year,” he says. We like the broad index ETFs to gain that exposure.”
Specifically, which is the only way Breakout does stock picks, Pestrichelli says the PowerShares QQQ (NASDAQ:QQQ )which mirrors the NASDAQ 100 (^NDX), and the SPDR S&P500 ETF (NYSE:SPY) are the ways to play this environment, though he suggests limiting downside risk to 10%. (As a matter of disclosure, I’m scaling into S&P exposure through the SPY, with a stop below 1220.)
“If there’s anything that’s going to lead us out of the market here it’s going to be energy,” Pestrichelli says. He says the group has more room to run, despite a potential threat from China which continues to slow. He says Exxon Mobil (NYSE:XOM) and Chevron (NYSE:CVX) will outperform the Energy Sector SPDR (NYSE:XLE), suggesting a paired trade for those so inclined.
See the full “Breakout” interview below: