The current rally in the bear market is a good time to reallocate holdings – and holding cash isn’t a bad idea, says one strategist.

“We recommend using these times during bull market rallies and bear markets – to reallocate your portfolio – to clear out some of the holdings you no longer want and reposition what we think is like. ” Kathy Entwistle, managing director at Morgan Stanley, told Yahoo Finance Live.

“The amazing thing is that cash is now king. It’s very powerful. You get paid in cash,” she added.

Certificate of deposit rates are getting higher under the Fed’s current monetary tightening.

“We’re also bullish on bonds, municipal bonds, senior corporate bonds and Treasuries,” Entwistle said.

The strategist stressed that “the equity part is a little difficult right now and we are very cautious and prudent, just stepping in when the market is seeing more declines than market rallies.”

Quincy Krosby, chief equity strategist at LPL Financial, said defensive stocks are a way to get into the market if you plan to stay in the stock market.

“We still like health care,” Krosby said. “Once the capital markets come back to life, you’re going to see a lot of trading in the healthcare space, biotech and big pharma.”

She is also bullish on energy.

“I know oil prices have fallen, [but] we actually like the energy complex,” she added.

The strategist noted that crude oil had removed China’s concerns about COVID and that the market was also suffering from low liquidity.

“We think that’s going to change,” she added. “We have a shortage. If that’s where we’re going, we need to get to the green side.”

“The US needs to rely on something – diesel and fuel – until we get to the other side,” she noted.