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After Trump rally, equity investors move into healthcare, retailers


´╗┐High U.S. share prices are pushing Lipper Award-winning equity fund managers into the shares of beaten-down healthcare companies, retailers and emerging-market stocks that they say offer a greater chance for outsized gains. Fund managers from Poplar Forest, Parnassus Investments and Brandes Investment Partners are among the 2017 Lipper Award winners who are concerned about the high valuation of the benchmark S&P 500 index. With a forward price-to-earnings ratio above 18, the index is at the high end of its historical range. Even after tumbling on Tuesday, the index is up more than 10 percent since Donald Trump's unexpected U.S. presidential election victory on Nov. 8. "It's absolutely harder to find stocks at attractive valuations" now than it has been in the past few years, said Todd Ahlsten, lead portfolio manager of the Parnassus Core Equity fund. As a result, Ahlsten said he has been adding to his positions in healthcare stocks such as Gilead Sciences Inc (GILD. O), Allergan PLC (AGN. N) and Novartis AG (NOVN. S). Healthcare stocks had fallen in price on concerns over possible drug price controls ahead of the vote on the Republican bill to repeal and replace President Obama's signature healthcare law. Shares of Gilead Sciences have slumped 5.5 percent since the start of the year; shares of Novartis are up 2 percent over the same time. The vote, scheduled for Thursday, has now been postponed.

The S&P is up about 5 percent in the year to date."We feel like the rhetoric out there is creating opportunities," Ahlsten said. J. Dale Harvey, portfolio manager of the Poplar Forest Partners fund, said he has been trimming his energy and materials shares exposure and buying into brick and mortar retailers whose stocks have come under pressure as Amazon (AMZN. O) continues to expand. "Mall-based businesses are facing declining traffic, but we're trying to look for the proverbial baby thrown out with the bath water," he said. "So far that has been early, but we have a habit of being early."

He recently added a position in mall-based Signet Jewelers Ltd (SIG. N), which is looking to expand its number of freestanding stores. Shares of the company are down nearly 30 percent for the year to date and trade at a price-to-earnings ratio of 9.7. "There's a lot of negativity embedded in its valuation that we think is not warranted," Harvey said. Not every Lipper Award-winning fund is turned off by the high valuations, however. Robert Marvin, portfolio manager of the Hood River Small-Cap Growth fund, said the recent stock market rally prompted him to buy recreational boat builder Brunswick Corporation (BC. N) and recreational boat and yacht dealer MarineMax Inc (HZO. N). Shares of both are up more than 10 percent in the year to date.

"We're starting to see significant improvement in demand as middle- and upper-income consumers feel the wealth effect," he said. Kenneth Little, a co-portfolio manager of the Brandes Global Equity fund, said high valuations have left his fund "significantly underweight" the U.S. Instead, his fund has been adding positions in emerging markets such as South Korea, Russia and Brazil, with large overweight in energy holdings and healthcare. The fund is focusing mostly on large-cap companies such as Russian oil producer Lukoil, Brazilian aircraft maker Embraer SA, and South Korean auto parts maker Hyundai Mobis Co. "The U.S., broadly speaking, looks pretty fully valued to us," he said. By comparison, in emerging market stocks, "if you look through the short-term challenges, you have very good companies trading at very attractive prices," he said. Thomson Reuters Lipper is a division of Thomson Reuters Corp, the parent company of Reuters.

Your Money Drinking and shopping brews up a nasty cocktail


´╗┐onesty time: What is your most embarrassing drunk purchase?When Reuters canvassed social media on this very question recently, we got some cringeworthy responses. A wrist tattoo of a shooting star. $400 worth of orange Agent Provocateur lingerie. 14 separate Snuggies, in blue. A lava lamp. Bright pink jeans. Perhaps most horrifically, a copy of the Nicolas Cage stinkbomb movie, "Left Behind" (rated 2 percent on Rotten Tomatoes). You get the picture. A third of Americans admit to having shopped while under the influence, according to a new survey by the financial comparison website Finder.com. Among those who regularly drink alcohol, that figure rises to almost half. The damage was not minimal, either. The average price tag of those drunk shopping sprees was a whopping $206."What is interesting is that people are not just buying something small, like a pizza slice or a pack of cigarettes," says Michelle Hutchison, Finder.com's money expert. "These are significant things people are buying."

The most common spending while under the influence? Clothes and shoes, bought by 39 percent of drunk shoppers. That is tied with gambling, also at 39 percent, followed closely by cigarettes at 38 percent. And who exactly is doing the drunk shopping? Millennials, apparently, 39 percent of whom cop to the practice. They are followed by Gen X at 36 percent, and then by more restrained baby boomers, at 18 percent. Retailers know all too well that drinking and spending money do not play nicely together, at least for the spender. You may have noticed an increasing number of "Sip and Shop" special events; bars being installed at high-end retailers and shopping malls; and extended shopping hours around high-alcohol holidays like Thanksgiving."The folks who are out with me on Black Friday in the stores at 5 a.m. are not ladies who had gotten up at 4:30 and headed out, but rather, people who have been up all night - and usually drinking," says Kathryn Hauer, a financial planner in Aiken, South Carolina. So, what's the overarching reason why drunk shopping has become so prevalent these days? Online retailing. If you do not have to drive anywhere, or lug any huge boxes, but just have to click a few buttons or even one button, hey presto, you have a veritable army of tipsy shoppers.

Here are some pointers, then, on how you can build up your defenses against a litany of regrettable, booze-soaked purchases:* Leave the credit cards at home. Stick to cash for a night out, and a predetermined budget, and you automatically limit any potential damage. Even better, leave your credit cards with a roommate or partner, who can serve as another line of defense against overspending.* Delete shopping apps.

The era of "1-click" shopping makes spending binges just too tempting. So delete your Amazon app from your phone - not forever, just for the course of your boozy night out. Re-install it the next day when you are nursing that hangover and are less likely to splurge.* Tie your own hands. If you really distrust your own ability to resist drunk shopping, consider deploying tech tools to help you out. The "Freedom" app, or the Chrome extension called "StayFocusd," can help block or limit your own access to tempting websites - either altogether, or during certain timeframes.* Know your return policies. If you only shop at retailers that have relatively liberal return policies, you can save yourself a lot of future grief. Even if you do get refunded, though, remember that you may have to cover fees for shipping or restocking. "One of my clients goes shopping every Black Friday after a few Bloody Marys with her partner," says Atlanta financial planner Niv Persaud. "They have a blast. Then, over the weekend, they return a lot of items."(The writer is a Reuters contributor. The opinions expressed are his own)