Veteran investor Michael O'Rourke recommends pulling out of high-growth tech stocks because it will be "significantly positive" for banks when the Fed finally raises interest rates.
"growth stocks have risen unbelievably," O'Rourke, chief market strategist at Jonestrading, said on Monday. "We're starting to see some cracks, and maybe it's better to put the money somewhere else."
As yields rise, the premium investors pay for holding high-growth stocks is becoming less and less attractive, so it may be necessary to shift to value stocks, O'Rourke added. As for where to switch, O'Rourke says the energy and materials sectors are particularly attractive.
"you see some investors buying commodities because they are worried about the current shortage and the scarcity value is driving up the attractiveness of the sector," he said. "whether it's energy or materials, I think they're all areas where people want to stay at the moment."