About one point five billion dollars in assets under management.
Well, that's exposure with those assets. This volatility must be exhausting.
Oh, yes. It's been a roller coaster ride.
I think the market's been trying to find its bottom.
But, you know, in my profession, where I'm in the business of meeting clients
long term goals, the day to day, it really doesn't matter.
What really matters is the longer term. And that's what people have to adjust
themselves. They have to resign themselves to the
fact that we will continue to have this kind of volatility.
And it's not over until it's over. And the signs of it becoming overt are
just barely beginning to show up. Now it's in the labor market.
The payroll and and by the way, I know how much you like bonds.
I think it's getting very close to being a bond bull market.
But not quite yet. But we're like weeks away from that.
You know, I mean, it looks, Nancy, it does look like we're potentially headed
there. And I think you make a good point here.
Not necessarily focus, at least for you and your clients on the day to day, but
the long term. And right now, most people, at least the
day to day traders, are betting that the long term is going to be a persistently
higher Fed funds rate or persistently higher, of course, Treasury rate as a
result. And of course, that means valuations on
everything else have to adjust to that as well.
Is there an adjustment already taking place by you and some of your clients?
Absolutely. I think I actually believe and maybe I
could be wrong about this, but I actually believe Mr.
Powell when he says he's going to continue to raise rates in November and
in December and, you know, get to a certain level before they take a pause,
as he called it, to see what the effects are.
I do believe that that will happen. But I also believe that the market's
already priced all that in. In fact, I think the market may have
even priced a recession in, which is almost inevitable at this point in 2023.
But I would still ere on the side of caution and be very prepared for more
bumping this along the way. This is not going to be a smooth ride if
things have become priced in and if everything seems and is going to
deteriorate. Do you wait longer?
Do you decide actually that now is a decent time to stop putting money to
what you might not be calling the bottom, but you're going to near it?
Yeah, not trying to time the market is is really not a good approach to
investing. If you have long term goals that are at
least four or five years or longer. This is a great entry point.
I mean, the market's down 25 percent. That's a pretty good deal in my book.
And if you're in it for the long term, you're going to be just fine.
But if you're trying to time when the bottom is, you could actually lose.
The risk is higher because when the run up occurs, it runs.
It goes very quickly. Nancy, when we talk about the potential
for a recession risk, I know we should point out the Bloomberg economics model
actually now projecting a 100 percent chance of a recession into next year.
And we've heard from Citigroup and a few other major banks here in the U.S.
basically saying that the recession is basically a lot based on the market
pricing that they're looked at. That's the U.S.
story. I am curious about the European story,
not only whether they're headed for a recession, but whether you see any
opportunity over there for some of your clients to maybe find, if not bargains,
at least opportunity. Yeah, I think that the international
market is very, very difficult right now.
They are definitely, in my opinion, heading for a recession, if not already
there, and they're really struggling with the whole Ukraine Russia war and
the supply of energy and the cost of the energy and maybe even a shortage.
And then even if you find some glimpses of opportunity, by the time you convert
to that currency, the U.S. currency, you're barely even if still
not negative. So I think it's a very, very difficult
play at this time when there's so much more opportunity to be had in the U.S.
side. However, having said that, a few few
months down the road and perhaps by mid-year next year, there will be
significant upside opportunity in Western Europe as well.
OK. So budget time on Europe now is perhaps
about Tom Keene putting money to work here in the US where then within say
equities, you're saying already we're heading towards fixed income and some
sort of a ripe opportunity, but within equities, are you looking at maybe the
battered down growth stocks that now have a valuation that's attractive or is
it more just riding out for cyclicals and.
So, again, it all has to do with timeframe.
I think the the safer bet are income stocks know anything that is mid-cap or
large cap value would probably be a good opportunity.
But being an opportunist, I always go for what's been beaten up the most.
You know, that's certainly information technology.
I mean, that's taken such a big beating. And if you're in it for the long term,
this is going to be a great payday. Energy, certainly.
And also alternative energy is is a grand opportunity as well.
Financials have taken a beating more recently, so that could be a grand
opportunity. So really has to do with the individual
investors timeframe and risk tolerance and
what their preferences are.