Kevin Mahn expects several 1%–5% market pullbacks before the midterm elections, but says a correction is not his base case. Further U.S.-Iran escalation and oil sustained at $110–$120 a barrel or higher could push markets toward correction territory, he said.
Mahn, president and CEO of Hennion & Walsh Asset Management, said he would put new money to work rather than try to time the market. He favors stocks for growth and bonds for income, and singled out municipal bonds for investors seeking both. He cited his firm's analysis that the 20-year municipal bond index's yield came close to or exceeded 5% in only 6% of months over the past 25 years; in those instances, yields fell by an average of 80 basis points a year later.
Among the stocks he discussed, Mahn named Nvidia as his pick for the most upside through year-end from his earlier selections, called IBM an underappreciated contrarian idea and said AMD could be a formidable Nvidia competitor.
