- Strong market fundamentals justify the current rally despite weak economic data, said David Waddell.
- Waddell is considering a rotation back towards growth equities to navigate a slowing economy.
- To capitalize on a weakening dollar, he also recommended investors buy international stocks.
Following a slide into official bear market territory, stocks suddenly reversed course last month to pare back some losses, with the S&P 500 and Nasdaq Composite up almost 10% and 13%, respectively, since mid-July.
Some investors, like Bank of America’s Michael Hartnett and former PIMCO CEO Mohamed El-Erian, believe that current economic data paints too gloomy a picture for the bear market rally to continue. But David Waddell, who serves as the CEO and chief investment strategist of $1.4 billion firm Waddell and Associates, disagrees with this sentiment.
“The markets are projecting forward that inflation’s coming down, which means valuations can go up. Because of that, I do think the market bottom is in,” Waddell told Insider in a recent interview. “There’s a lot more opportunity than people see, and the pessimism makes me bullish.”