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tephen Wood, Russell Investments chief market strategist, on how to get the most returns from mega-cap stocks.
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Wanted to tell you guys that 660.
Of the S&P 500 stocks are touching new 52 week -- some of these -- Very big names and they aren't doing incredibly well our next guest is right on board he says.
If -- want mega returns going forward you have to look at mega cap stocks.
He is Steve what Russell investments chief market strategist joining us now in a Fox Business exclusive.
Yes we all want -- to return.
Why do these do particularly better since the start of this year.
Well I think you're seeing an uncertain environment say this is risk on risk off a lot of people look at that has been just stocks vs -- And that's part of it but -- also be looking within its equities just to solve this -- you know the way of looking.
Where within equities so the further you've gone -- the capitalization spectrum -- the larger of the stocks event he's senior to date in an uncertain environment with a lot -- uncertainty uncertainty.
Larger cap names more stable more dependable companies of -- fair but.
Better so you're saying that this is a way to have a little bit of risk gone with the actual equity -- risk off because they are solid names at a time when what the consumers more choosy more picky and so therefore they go with a bigger.
More well established names that's extremely well but I would you say yes it does very well sure that it gets -- -- get more good diversification within equities.
So lot of people are thinking if I'm a little bit nervous if I'm getting scared I need to sell out of my stocks what we're saying.
Is by looking within these.
Great global companies they they got strong balance sheets they can tap debt markets equity markets great franchises they're not just US based.
And that those global franchises.
You get better because of visibility you right there let me just -- right there on the screen the Russell top fifty that's how well they have -- up 21%.
Year to date and also up about 28% year over year.
They have outperformed say for example the Russell 2000 expect a small but it's up sixteen -- -- today.
That may be your best selling point price I think so and him when you're looking at a time where we've got the fiscal -- coming up what will quantitative easing three or QE infinity.
Me -- -- QE perpetuity what does that mean.
So as visibility -- lower as the market gets more choppy you can still get some of that protection without necessarily have to get -- some of the names up -- -- look familiar because many of them are Dow components because they are mega caps but you also have names out there like US Bancorp Visa is in there.
Wal-Mart of course the Dow component too but when you look at some of these names they are all extraordinarily well -- -- Qualcomm for example Iraq.
And that's how they get to be the mega cap stocks in many ways because.
Knowing the market votes and by that the capitalization boys up goes up they qualified to be in that index but -- there are -- -- names and again that's part.
Of the logic you want -- strong balance -- that you can really get some visibility into.
As well as we look into the economy the United States especially in Europe as well if visibility is getting to be -- scarce commodity so that the the started the visibility.
That it didn't agree that we can -- was heavily these companies investors can.
I guess and security Steve wood of Russell investments mega caps for better returns that's -- -- message to remember folks thank you so much.
