U.S. bank stocks are fine, if you are rich in patience

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U.S. bank stocks are fine, if you are rich in patience
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The U.S. bank sector has been pummeled this year but investors hunting for bargains there may need deep reserves of patience as banks are particularly sensitive to low interest rates, the uneven economic recovery and the muddy stimulus outlook.

FILE PHOTO: A woman counts U.S. dollar bills at her home in Buenos Aires, Argentina August 28, 2018. REUTERS/Marcos Brindicci/File Photo

To be sure, if lawmakers in Washington manage to reach an agreement, a new fiscal stimulus package could help banks if it boosts U.S. loan growth, interest rates and economic activity. “You’re looking at years for this sector to make a full recovery. It will take a lot of positive things to happen in the U.S. economy for it to get back to the type of performance we are seeing in the broader S&P,” said Rick Meckler, partner, Cherry Lane Investments, a family investment office in New Vernon, New Jersey. “Investors, in my view, will need to be patient.”

Meckler says further stimulus would be “a good first step towards a better environment for to generate top-line and bottom-line growth.” Lamar Villere, co-portfolio manager, says these banks are small enough that he can more easily examine their risks than the exposures of more geographically diverse and larger banks like JPMorgan Chase & Co or Wells Fargo & Co .

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For the rich everything is fine and the poor are in a hot water

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