Like Mr. Paolini, Mr. Pyle at BlackRock prefers European stocks.
They “tend to be fairly cyclical, and we expect cyclicality to have room for performance,” Mr. Pyle said. The region “has more potential upside and more resilience to the downside.”
Mr. Pyle acknowledged that a shift into cyclicals or other out-of-favor areas is no sure thing. If gridlock in Washington continues, for instance, “quality stocks like tech are going to continue to be a tried-and-true theme,” he said, while unified Democratic control would encourage a rotation into market segments like smaller companies. “We’re on an important knife edge economically,” he added.
Some investors put off by the high prices of the technology giants are looking for smaller tech stocks that are cheaper and have more room to grow.
“If everybody’s pointing at something, it’s pretty hard to make outstanding returns,” said Kevin Landis, chief investment officer for Firsthand Funds, which