Tom Forester, whose Forester Value was the only stock mutual fund to end 2008 in the black, says he believes the market has bottomed, but that stocks are now in a trading range.
“I do think it has bottomed,” Forester tells the Nightly Business Report. “But I also think we’re in a trading range. We could go up 20 or down 20 from here. … I think if you’re a longer-term holder, in the three- to five-year range, at these valuations, I think you’ll do quite well in the market. One of the kickers you get from here is you get multiple expansion, which is great for returns.”
Forester, whose fund is up 3.2% this year but is slightly lagging the S&P 500, said right now he really likes Microsoft and Hewlett-Packard, which he believes will benefit from an upcoming corporate replacement cycle, and ConocoPhillips and Chevron, which are benefiting from rising oil prices.
Forester had stayed away from financials before buying shares of State Street back in March, a stock he still likes. “But we also think that financials have gone quite far quite soon,” he said. “We would expect to see some sort of a pullback here and we’d expect to be buyers on weakness on financials.”