With The S&P 5000 Flat For The Year, Is Sitting On Cash The Best Alternative?

Four months into 2015and S&P 500 is still nearly at the same levels where it was an year ago. So, is it time to stay invested, take your money out or to shift it elsewhere?

Edward Campbell, QMA portfolio manager, was on CNBC Tuesday to answer those questions.

U.S. Stocks Still Attractive

“I would definitely not be sitting in cash and we would be overweight stocks,” Campbell said. “We still like U.S. stocks, we have rotated overseas where we think you are going to get more bang for your buck.”

Futures

On what asset class he has chosen to rotate investment overseas, Campbell said, “We have done it with futures. We have done it with futures because we did not want the currency risks associated with Japan and with Europe because we thought the U.S. dollar would continue to strengthen.”

“And that happened indeed that happened in the first quarter and now we are starting to see the U.S.dollar flat-line a bit here and consolidate. We think that’s likely to be the trend for the next quarter or so.”

The Rising Dollar

Campbell was asked if he expects the rising dollar to continue to impact companies. He replied, “Well you will remember that the U.S. is a relatively closed economy, just 13 percent exports. So, I think the U.S. can absorb the headwind of a rising dollar.”

“You got to remember that in the late 1990s we had a very strong dollar. We still had the U.S. stock market outperforming. So, I think this year is going to be a decent year for U.S. stocks. I don’t think it’s going to be a great year.”

“If we look at where we are year-to-date through last Friday, we are up about 3.5 percent. If you annualize that, you get to a number like 10 percent so similar to what we got last year,” Campbell concluded.