Neglect progress shares like tech. Analysts are recommending that traders go for corporations with masses of cash. The market rallied in January — together with the tech-heavy Nasdaq Composite, which rose almost 10.7% final month for its finest month-to-month efficiency since July. However analysts say corporations with pricing energy are a safer wager than tech, provided that inflation is anticipated to remain excessive this 12 months and the uncertainty round when the U.S. Federal Reserve will pivot to decrease rates of interest. “The Fed is cautious of offering an excessive amount of traction to the ‘pivot’ narrative,” stated Robert Schein, chief funding officer at Blanke Schein Wealth Administration. “As a result of we do not know the way excessive the Federal Reserve plans to hike rates of interest, traders needs to be ready for extra volatility via year-end and into 2023.” “We’re beginning to enter a bifurcated market: corporations with sturdy stability sheets will maintain up a lot better than progress corporations which have by no means posted a revenue,” he added. Sean O’Hara, president at Pacer ETFs, sounded an analogous notice, saying that markets will proceed to be unstable. Tech shares have gotten “a little bit forward of themselves,” he advised CNBC’s ” Squawk Field Asia ” final week. “For now, shares that commerce at a reduction to the general market [price to earnings] that generate excessive free money move are preferable to the expansion names that led the final bull market cycle,” he stated. Firms with greater free money move yields are usually in a stronger place to satisfy its debt or different obligations. It additionally signifies how rapidly an organization can entry money within the occasion of an emergency or alternative. Inventory picks O’Hara stated power, well being care and supplies are higher bets. His high picks are U.S. biotech firm Moderna and oil and gasoline big Chevron . He stated his agency has been bullish on power, due to excessive free money move yield within the sector. “It isn’t 100% the value of oil, it is partially the discount in [capital expenditure],” he stated. “Power corporations used to take each greenback they may get their palms on … They are not doing that anymore.” “They’re mainly pulling of their horns … they’re shopping for again shares they usually’re paying dividends and growing their dividends. And so that is what’s driving actually the story for power,” O’Hara added. Schein of Blanke Schein Wealth Administration can be constructive on power and well being care. “High quality corporations with sturdy stability sheets and a historical past of dividend progress are effectively positioned for quite a lot of financial environments,” he stated. He likes American mining firm Freeport-McMoRan , a significant copper producer. “This copper-focused firm is effectively positioned to navigate our inflationary setting attributable to pricing energy and excessive demand,” Schein stated. “Traders want to fade the expansion commerce in favor of extra dependable money move producing shares. FCX principally focuses on copper and gold mining, so traders will discover the corporate extra engaging as metallic costs transfer greater,” he stated. Copper and gold costs have been on a tear, rising 11% and 6% respectively within the 12 months so far.