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Market veteran Nancy Tengler says talk of a new bull market is premature as she names her favorite “safe” stocks. “I think this rally has been very good,” Tengler, CEO and chief investment officer of Laffer Tengler Investments, told CNBC’s “Squawk Box Asia” last week. “Since mid-June, we have been increasing risk in our portfolios and that is working very well. But I don’t think we are running into a new bull market,” she added. He pointed to recent data indicating that inflation has peaked, but stressed that “work remains to be done” to meaningfully bring down inflation, which is high compared to a year ago. There is uncertainty over the course of further interest rate hikes as the US Federal Reserve is “relatively unlikely to stick to its plan”. “You shouldn’t dismiss this rally because we don’t know if the Fed is going to go to 75. [basis points]. We don’t know if they’ll make a policy mistake, Tengler says, describing the “tug of war” between conflicting data: Commodity, food and energy prices, for example, are down, but rents and other inflation metrics left high.. ‘Don’t be a hero’ Tengler’s advice to investors ? “Don’t Be a Hero” shifts its portfolio to include “safer growers,” or companies with a proven track record of growing revenue. “We got rid of some of the more cyclical names and added to some defensive names late last year … whose revenue growth is reliable and we’ve tried to stick with reliable profit growers,” she said. With a stock now in her portfolio that is music streaming service Spotify, Tengler acknowledges the high-profile challenges facing rival Netflix, but believes the companies have different perspectives because of their different business models. You can keep your music on when you leave the house. Staying home is not a game. And you can listen to podcasts. They’ve really increased their business segment,” she said. Read More Tesla’s price won’t make sense until it reaches this point, says fund manager Is it time to go all in on the tech? Top investor Paul Meeks shares his stake. Takeaway – And what to buy reveals ‘pretty compelling value’: The analyst picks top global stocks to withstand slow growth She’s also bullish on some cloud and cyber security names in the tech space. “We saw during the earnings season that the cloud providers had a good return on performance,” she said. She named Microsoft, Amazon, Oracle and parent company Google among her favorite stocks. She continues to do so,” she added. In the semiconductor space, she likes “broadly diversified” companies that she thinks will benefit as the sector recovers and has a good capital allocation plan. Texas Instruments — two companies that return most of their free cash flow to shareholders through dividend increases and share buybacks.
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