Three picks from investor Kevin Simpson to capitalize on this market melt-up
(PRO Views are exclusive to PRO subscribers, giving them insight on the news of the day direct from a real investing pro. See the full discussion above.) As this stock market is ripping to records, Capital Wealth Planning’s Kevin Simpson is keeping his cool, scooping up some value picks that will benefit as the rally broadens out, while deploying his tried-and-true options strategy to generate income. He’s also playing along with one bull market leader — Meta — which he still puts in the value category despite its 33% gain this year. I spoke with Simpson, whose Morningstar five-star rated exchange-traded-fund offers smooth upward returns, on Wednesday as the Dow Jones Industrial average popped 400 points for a second day in a row following a tame-enough CPI report that sparked speculation multiple rate cuts from the Federal Reserve were just around the corner. “Markets are right now riding a rate-cut-environment wave that can continue and I think that the risk is missing the upside here over the short term,” said Simpson, founder and chief executive officer at Capital Wealth, in the interview exclusive to PRO subscribers. Simpson, a regular on CNBC’s ” Halftime Report ,” added to McDonald’s and RTX (Raytheon) in the past week for their solid dividends and value profiles. “We’re not looking at things that you’re chasing. We’re not going after the memes. We’re looking for things that have a little bit of value,” he said. MCD YTD mountain McDonald’s YTD And he added to the Facebook parent this week too, which was his No. 1 pick going into the year. “We believe in it long term. We believe in the valuation,” said Simpson. “The spend they are doing on AI is substantial, but I think at this stage if you’re not spending on AI, you might be penalized longer term.” META YTD mountain Meta, YTD Simpson also was writing covered calls in this frothy environment, which entails selling call options on a portion of the stocks you own at higher strike prices. The method allows you to collect the options premium from the sale to generate income. You do give up some of the upside because if the stock rises to that higher level, the shares can be called away from you. But it’s a method he uses to generate smooth returns over time. His firm manages the Amplify CWP Enhanced Dividend Income ETF (DIVO) and the Amplify CWP Growth & Income ETF (QDVO) for investors and advisors who want Simpson to deploy the strategy for them instead of doing it on their own. (See the full discussion above.)
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