Bloomberg Anywhere Remote Login Bloomberg Terminal Demo Request


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Markets & Finance

Playing It Safe

We're coming full circle. High-quality, low-risk stocks -- think basic necessities like food, health, and money -- are back in favor, in our view.

Based on our analysis of market trends, we believe we are at or near the point in the investment cycle when it makes sense to overweight non-cyclical as opposed to cyclical issues. From a quantitative point of view, we particularly favor consumer staples, health care, and, to a lesser extent, financials.

If you want to use exchange-traded funds, three options are Select Sector SPDR-Consumer Staples (XLP), Select Sector SPDR-Health Care (XLV), and Select Sector SPDR-Financials (XLF).

We forecast that S&P 500 earnings will gain 11% in 2006 vs. 13% in 2005 and 24% in 2004. As we see it, a combination of slowing corporate earnings growth and higher interest rates (with both short-term and long-term yields now rising) will prompt investors to migrate toward less risky assets.

What's more, we note that the Chicago Board Options Exchange volatility index is at lows not seen since 1994-1995, and that February, 1995, marked the beginning of a cycle of high Quality Ranking outperformance that lasted nearly five years. Richard Tortoriello and Massimo Santicchia of Standard & Poor's quantitative equity research team believe we could now be on the verge of another period of outperformance for stocks with high Quality Ranking scores.

We recommend stocks that have the highest scores in both our STARS (STock Appreciation Ranking System) and Quality Ranking systems.

blog comments powered by Disqus