Investment Chief Likes Less Volatile Stocks, Bonds
VIENNA TOWNSHIP, Ohio – The chief investment officer of Huntington National Bank, B. Randy Bateman, advises putting one’s funds into companies that make consumer staples, agricultural companies, utilities and corporations that pay cash dividends.
Bateman, also president of Huntington Asset Advisors Inc., spoke Wednesday to friends and customers of the Mahoning Valley Region of the bank at the Avalon Country Club at Squaw Creek. “Overweight to safety,” he said, in light of Barack Obama’s re-election as president.
With Obama’s win, he said, Huntington Asset Advisors “have reduced our betas,” that is, reduced the volatility in its portfolios of stocks by 5%.
With Congress headed toward a so-called fiscal cliff and the threat of sequestration looming larger, Bateman would “avoid [investing in] defense companies.” On the other hand, he thinks gun manufacturers, insurance companies, pharmaceutical companies that produce generic medicines and municipal bonds will do well in the short term.
Last summer’s drought has resulted in a small harvest while the number of people to feed remains unchanged. Hence the price food will rise. “A visit to your grocery store could tell you that’s already begun,” he said. “Food prices have gone up.”
Who stands benefit from higher food prices? he asked rhetorically. Farmers and the companies that sell them farm equipment and supplies such as tractors, reapers and fertilizer.
Bateman is not as enthused about investing in energy stocks even though “gas[oline] prices have gone up.” He does think investing in green energy makes sense.
And in response to a question from the audience, he sees the region benefiting from the oil and gas in the Utica and Marcellus shale. “Everyone’s enjoying the largesse,” he agreed. More important is the technology.
Those who see the world running out of food or energy, or who fear pollution is too high a price to pay, fail to appreciate that “Technology is the answer to a lot of problems,” he said. “[Thomas] Malthus didn’t recognize this.”
Natural gas is a source of much cleaner energy and this region will benefit.
His take on inflation while interest rates remain at historic lows and energy and food prices rise: “Inflation is here. It’s been masked by the housing situation. The Fed is keeping interest rates down artificially.”
And Bateman says Democrats and Republicans in Congress can and must reach an agreement before the Bush tax cuts expire and sequestration takes effect Jan. 1. He agreed taxes must be raised but declined to say by how much and who should assume more of the burden.
“It makes sense to have a flatter tax,” he said. And everyone should pay taxes. “You need to have some skin in the game.”
On the other hand, raise taxes too much on the wealthy, or anyone for that matter, and they’ll work even harder to avoid paying taxes, such avoidance would depress revenues and make the deficit even worse, he said.
Copyright 2012 The Business Journal, Youngstown, Ohio.