All of the top firms that we cover at 24/7 Wall St. seem to be getting the same question from their clients. What do we do now that the market is hitting all-time highs? At this juncture, who can blame them? Record highs, the overall market up more than 200% since the bottom in March 2009 and a growing unease that the Federal Reserve is about ready to take the punch bowl away.

A new report from Baird addresses the “what to do now” concerns with an overall belief that the analysts see no major correction or risk-off trade coming. They also feel that energy is cheap, but there are few actionable stocks at this point. One area they thought will see a big rotation of investment capital is financials. They think that investors with big gains in real estate investment trust (REIT) and utility stocks may start rotating money there.

We screened the Baird top financial picks for stocks that have perhaps the biggest upside from current trading levels.

Bank of America Corp. (NYSE: BAC) remains perhaps the perfect contrarian pick. A huge accounting snafu hurt the stock in the spring, and the government is settling up with the bank for $17 billion in yet another legal settlement on bad mortgages. In adding up the sum-of-the-parts value for the stock, which trades at a deep discount to regional banks, many on Wall Street see a value much higher. It is also important to remember the huge impact that Merrill Lynch has on the bottom line.

Bank of America investors recently got a boost in the dividend, which is now up to 1.2%. The Thomson/First Call consensus price target is $17.76. Shares closed Friday at $16.95.

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Citigroup Inc. (NYSE: C) has been a poor performer this year for investors and portfolio managers, and it is still down below the highs posted in January. The bank trades a very reasonable 11.2 times trailing earnings. With loan activity and other banking services starting to ramp up as the economy improves over the second half, adding this quality large cap bank to a portfolio at an incredibly low price now makes good sense.

Investors in Citigroup are paid a miniscule 0.7% dividend. The consensus price objective for the stock is $58.75, and the stock closed Friday at $53.48 a share.

Intercontinental Exchange Group Inc. (NYSE: ICE) makes the Baird list and is the leading network of regulated exchanges and clearinghouses for financial and commodity markets. The company delivers transparent, reliable and accessible data, technology and risk management services to markets around the world through its portfolio of exchanges, including the New York Stock Exchange, ICE Futures, Liffe and Euronext.

Investors are paid a small 1.3% dividend. The consensus target for Intercontinental Exchange stock is $218.44. Shares closed Friday at $203.80.

Invesco Ltd. (NYSE: IVZ) is another top stock at Baird that has been, and they expect will continue to be, a big benefactor of the long-running stock market rally. The financial services company has strong positions in both equity exchange traded funds and actively managed equity funds, and it is well-positioned to capitalize on inflows into both segments as well as higher asset prices.

Invesco investors are paid a 2.45% dividend. The consensus price target is set at $44.18. The shares closed Friday at $40.99.

JPMorgan Chase & Co. (NYSE: JPM), like most of the top money center banks, may finally be nearing the end of a very long stretch of losses and penalty payouts. Between mortgage settlements and trading gaffes, the company has taken a PR beating and has still held up well. The latest headline overhang was a cyberattack on the bank reported last month. The mega-cap bank is expected to benefit from commercial loan growth and an upturn in capital spending.

Investors are paid a respectable 2.6% dividend. The consensus price target is at $67.25, and J.P. Morgan closed Friday at $61.11.

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The Baird thesis on rotation makes very good sense as financials tend to do better in a rising rate environment, an area where REITs and utilities generally do poorly. Investors with big gains in either sector should consider rotating some of their portfolio money to these and other quality financial stocks.

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