Wall Street CIO tells investors: ‘Don’t fight tech, own it’

CNBC TV

  • David Bianco, DWS Group Americas chief investment officer, told CNBC that investors should own tech stocks right now, and wait until after the election to buy value stocks.
  • “We all wish our entire portfolio were tech stocks right now. We’re overweight tech, and that has helped us,” Bianco said.
  • He also suggested cushioning a tech-heavy portfolio with areas like corporate credit, municipal bonds, and real estate 
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David Bianco, DWS Group Americas chief investment officer, told CNBC on Tuesday that investors should own growth stocks, particularly technology right now, and wait until after the election to buy value stocks. 

“We all wish our entire portfolio were tech stocks right now. We’re overweight tech, and that has helped us,” Bianco said. The investment chief told “Squawk Box” that the economy as well as second quarter earnings results suggest that investors should look to growth stocks, and said: “Don’t fight tech, own it.”

Tech stocks in the S&P 500 have surged more than 10% since the February 19 market low, the most out of any sector. Apple stock rose 2.5% on Monday to $435.75, giving the company a valuation of $1.86 trillion. Last Friday, Apple overtook Saudi Aramco as the world’s most valuable company.

“The earnings results from last week and the continued challenges to this economy make us feel compelled to stick with it. The valuations are demanding but these companies seem to deserve it,” Bianco said. 

Read more:MORGAN STANLEY: The government’s recession response has the stock market heading for a massive upheaval. Here’s your best strategy to capitalize on the shift.

The chief investment officer suggested waiting until after the election to buy value stocks in industries like financials and energy. He said he thinks many industrial capital goods will be challenged throughout the year. 

He also told investors to be aware of the risks of owning tech, and to keep cushion in their portfolios. Bianco said he’s seen opportunities in corporate credit, municipal bonds, and “selectively in real estate.” He specified that corporate credit has done well compared to value stocks on a risk-reward basis. 

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