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Low interest rates may be good for gold: Barron's

Last Updated: Monday, January 30, 2012 - 12:37

New York: With near-zero interest rates likely to persist for two more years, some investors are bullish on gold and high-yielding stocks, while shares of some solid companies out of favor with the market are still relatively cheap, Barron's reported Sunday.

In the third installment covering the magazine's 2012 investors roundtable, T. Rowe Price Chairman and investment chief Brian Rogers said he seeks companies that have performed well but are ignored, including JPMorgan Chase & Co, Emerson Electric Co, Ingersoll-Rand, Microsoft Corp , Juniper Networks and Thermo Fisher Scientific.

Abby Joseph Cohen, head of Goldman Sachs' Global Markets Institute, says investors should look for companies paying dividends and buying back stack, which boosts effective yields to 7 percent or 8 percent. She also forecasts a good but not great year for the U.S. economy, while global growth will slip as Europe retrenches and China slows.

Her top picks included Exxon Mobil Corp, Boeing Co, Brazil's Embraer SA, American Express Co and Edwards Lifesciences Corp.

Delphi Management founder Scott Black projects growth, not recession this year in the United States.

He touted four stocks he believes can sustain their earnings and revenue growth yet saddled with low multiples -- Apache Corp, CBS Corp, FedEx Corp, Deere & Co -- and two high yielding REITs, BioMed Realty Trust and Digital Realty Trust.

Fred Hickey, editor of The High Tech Strategist newsletter, declared the 12-year bear market in tech stocks will likely hit bottom this year, and said he remained overweight in his gold exposure.

In addition to Microsoft, he recommended investors consider owning physical gold through iShares Gold Trust, a basket of gold and silver miners in Market Vectors Gold Miners ETF.

BMC Software is a takeover target, he said, while chip-marker Marvell Technology Group is poised to rebound later this year.

Bureau Report

First Published: Monday, January 30, 2012 - 12:37
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