Investing pros offer their best investing ideas

[June 23, 2012]  CHICAGO (AP) -- Tense financial times have only heightened investors' interest in finding bargains and safe harbors.

With Europe, China and the debt overhang complicating the outlook, they may be relying more on ideas from experts, such as the 1,850 financial planners and fund managers attending the annual Morningstar Investment Conference this week.

Numerous professionals offered up their single best investment ideas:

NATURAL RESOURCES

"We're on our way to 9 billion (population) and it's going to be extremely ugly. Running out of resources is going to play a big role in everybody's lives from now on, particularly in the poor countries, although we may be able to fake it for 20-30 years. Think favorably about resource funds."

--Jeremy Grantham, chief investment strategist, GMO LLC

BLUE CHIPS AND JUNK BONDS

"We like high-quality stocks -- Chevron, Intel, Johnson & Johnson, McDonald's, Microsoft -- and low-quality bonds. These bonds yield 7 percent or more, so you're being well-paid for the risks."

--Matt Freund, portfolio manager, USAA

PHARMACY STOCK

"Express Scripts, a pharmacy benefits manager, has a near-majority market share and will benefit from an aging population, more generic drugs and society's need to lower health-care spending."

--Paul Larson, Morningstar equities strategist

SENIOR DEBT

"Senior loans (loans that take priority over other debt in case the issuer goes bankrupt) are the place to be. They pay periodic coupons on time and have excellent financial strength at a time when investors are looking for yield with some level of interest rate protection."

--Kamal Bhatia, head of taxable fixed income and alternatives for OppenheimerFunds

LOTTERY COMPANIES

"Invest in companies that run lotteries or provide technology for them. Governments are going to have to rely more on lotteries and other new ways of getting revenue. We own Lottomatica, the world's largest operator of lotteries."

--Bernie Horn, president and portfolio manager of Polaris Capital Management

REAL ESTATE, INFRASTRUCTURE

"Buy real estate stocks or infrastructure-related stocks -- utilities and companies that build toll roads and airports. They generate high yields, so think of them as some downside protection."

--Andrew Smith, chief investment officer of the client solutions group at Northern Trust

[Associated Press; By DAVE CARPENTER]

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