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Planstrong Financial Forum 2-06-16

Feb 7, 2016|

"Smart investing, simplified"

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It's supplies strong credential for my heroes can Burberry the anchor desk and Paul Parsons is with me he's president of planned strong investment management. And people looking back the program Pauly notes that it's not quite. Golf whether anymore. Non not aware of that white covering that you know he's got to figure out what to do with that and lose the golf ball over his Leon you know those orange balls only work as longs before they land in the snow and then you Louis and already a very so it's a great idea until what Lance and his you can see it really well. There peso I another topic for your teach you watched the whole Madoff thing this week. Oh no I did see who's on an idea DVR deterrent than watching that remembering the weekend it is really disturbing my you know I'd read Harry mark pulses book. So I knew the details behind him for those of you that don't know who areas. He was the what's the whistle blower on Madoff and he went to the SEC. Probe the number of times 678. Trying to us. And and that I listen to him yet and and nick is yeah and they wouldn't listen to amend this sober series final 63 years and the SEC pretty much. Looked at him as somebody who they thought was kind of a disgruntled patted her something and you know chalice of Madoff success. As opposed to somebody who really. Had identified that the returns Madoff was claiming to have made. I had to his clients were literally at Paris medically impossible. And I and so and you know it is so troubling from so many ways that you know you look at made often and his character you look at. At you know the fact that there was a whistle blower you look at all the people or hurt so badly financially from and and I mean. You know fifty billion dollars that's a big number tomorrow and they've they've recovered I think around seventeen a bit but. Man oh man that's an awful lot of money that's you know gone forever probably and and and anyway it was intriguing but I I'll tell you it was also every troubling I will say a listeners out there. If you have trust issues with your investment manager. On -- couple of very easy things that you can do it may even save this group in the movie which is is passing me Madoff knew this Achilles heel. Was that. He you know he never bought a stock the entire time. Tomorrow he he all he did was took the money and spent it and and created fake records. And he kept enough cash on hand as in billions of dollars in cash to pay redemptions when people needed redemptions or dividends or whatever else I am. His Achilles heel was that if anybody asked him about the DTC account it would DT sees an acronym for the depository trust company. It's literally do would be at the location of where the ultimate shares resides think of it is the ultimate. Faults in her okay and they literally physically hold the shares or the electronic version of the shares okay. And they you know there was no TD TC account for his business and there was there were no shares in the on and so if anybody had said hate. Yeah and by the way the SEC did ask him for his DTC account number but nobody ever checked to see if there was anything in it. I really yes and so and again what goes back to the reason I'm bringing this up to listeners is in the end. Your assets should be held by an independent. Custodians and that custodian can be a fidelity it also can be pershing Bank of New York Mellon and it has to be a very well known large entity OK and that's your clearing broker and ultimately those assets are. Clear truth they are. And they're held at DTC. And in the and you want somebody at that institution to create records for you that says yes in fact you can car break. You have X number of shares at DT EC I OK and that's what those are statements or for that the thing that the way Madoff got around it was he created his own statements he sent out his own account statements to people. And as opposed to having the statements created by an independent entity. So if you're up an investment advisor and your investment advise her arm how helps you with what you're doing. Well that's great but you wanna make sure that your assets are constant need elsewhere we're certainly cost you in a place that you feel are is independent. And certifiable. So that you know that the assets really do preside that you are are being sent those statements for. There are and I imagine that watching that director of the made our program. May have put the interference from folks who remember blow up horrible situation was in I mean obviously. This is something that could happen if nobody's paying attention people are watching very scary what they actually did. Up fought our follow up that program afterwards where they actually interviewed Harry mark polish. And he's currently a consultant doing this kind of work. And he's in that he was asked are there more of these out there is another tool them and I'm looking into right now that are multi billion dollar ones are typically they're hedge funds and hand tipping you know I was so they have to be private. But there are other examples of this out there and so you know mighty it first of all I eight found it troubling and I'm in the business right okay which is really Dick concerning. But secondly the reason I bring it up is because when ever I ever talked to a client the first thing essayist. Here's where your assets resigned they don't resides with Parsons they don't you know I don't create the records the records come directly. From Bank of New York mallet from pershing and I have no control. And you can call them directly and interact with them and find out you know if you're assets that there and I think that really makes people feel a lot more comfortable. If they know that. Parsons is and also keeping the records what I'm doing is advising them on their accounts. And making trades on their behalf Wii is that independent broker dealer and a depth art are actually ultimately the assets preside at TTC. Well Paula as we talked about how how we do business is an end and especially this time of year is we're just still to begin new year just starting February. Folks are still getting their year end. Reports in there there statements and dust and they've also got their January statements which are justice uglier and uglier than their year end statements war so this should be a good time. To perhaps make a phone call to yeah NASCAR should tell you are we getting this kind of phone call you know so yeah what are you doing for. Yes so work getting quite a few calls for people let's say hey. You know it's hard for me to tell even how why did I mean I know that I made minus some dynamic they tell me the percentage they tell me the dollar amount. But what they don't tell me is compared to watch and at what risk level they made that return lost that time. On and you know what we're seeing now was not only was twenty. Fifteen you know obviously not the best years it the best index out there was the S&P 500 which was. An index of the 500 largest stock publicly traded stocks in the US. That made one point 4% including given that now is the best game in town for a OK and then everything you know European stocks arming else lost money compared to that. And commodities lost lots of money compared to that on and so what dirt that one of the typical questions is hey how should I have done. On and so we provide of nuts and called it a benchmark something against which you can measure your actual performance. On and it's differs based on what you're invested and if you're invested a 100% in stocks well done a benchmark should be made up of an index of you know large stocks. On the other hand if you're I invested a 100% in bonds Willie index should be against Powell up and in our group of bonds performed in that same period right and the idea Darius what your you're doing is matching risk. To the benchmark okay. And what were also seeing us like I said boy we were kept got off to a hard start at the beginning of 2069 other a lot of commercials out there right now that say. Worst start ever you know in the history of the free world. On two out to a stuck to a stock market in a calendar year. Which makes good radio but doesn't really mean much to me because all it means is for once we saw seven RE percent Corey you know reduction. They're just happy Nicole aside. Out with you know December 29. On the way to you know early February that doesn't mean you have we ever had six or 7% reductions before yeah where I sure think so on and so you know it it other madam makes good radio but what it means is. If you got your January statements my guess is you're seeing another negative number you probably wanna know. Hey how you know I know I did poorly and how poorly that I did did I do okay compared to the index or did I do worse than I should have done so folks are holed. Under the general restatements in their year end statements and they don't know what it all means it might look for a better benchmark. They call your office for no obligation portfolio review and that's we really give an unbiased assessment now of their card portfolio. And perhaps and you'll also give a benchmark that. They can use when you its interest in caddie not to belabor this point but. Often you know one trend that we seem more recently quite a bit is were getting people come in and we look at their portfolio Rico. We we think your portfolios actually. Got out many of the of the securities that we light in this environment. And then we say what prompted you to to reach out to us and they say watchers are performed this past year. And that they lost you know seven RE percent this last year. And that portfolio had they been in the portfolio that the percent of us actually you know broke even or lost 1%. And so what is obvious in that case is whoever's managing their money has been chasing returns and other words they bought things they did well they just bottom late in other words they were following things that they saw the weapons at all I should buy that too little. But they they've lost out on the great majority of it that it's not a winning investment matched management strategize wishing quite a few of those lately so again what I would encourage people to do is. Take a look at your statement. EE it's probably gonna be hard feat to find a benchmark. On your statement that is actually applicable to your circumstances. Even that conversation if you'd like to talk to us about that will tell you. What combination. Of those indexes that are typically provided to you on your performance metrics of a portion of your statement. Will tell you how did he developed a benchmark actually is appropriate for you worse circumstances. And then compare your results. Who. Excellent postal free number is eighty 89727526. That's 888972. Plan. We can go online to plant strong dot com Paul when we come back. We're gonna look at some of the businesses and news stories and investors need to know about of course will be lucky with the stock market's been doing it how that affects investors and don't forget obviously the big story of the week which was we got the labor report for January but we will look at those numbers and what they mean moment combat discipline strung financial form. This is all Parsons president of planned strong investment management. And you're listening to them plans strong financial forum on WRKO. Boston's talk stations. If you like what you hear on our show and what immediate take a look at your investments and retirement plan called my office at 80889727526. That's 888972. Plan. Securities and investment advisory services offered through metro metro group member finger as I can sequester investment management and building business financial group thinks is located in Washington can domestic and six. Hi this is Avi Nelson. People use different strategies to acquire enough money for retirement some try to do it themselves. Others buy insurance for investment products though sometimes will benefit the seller more than the buyer what makes sense is to hire an advisor with first rate credentials and why do investment management experience. Should have a fiduciary obligation to act in your best interest. And be paid the same amount no matter what your invested in if these things matter to you. Call Paul Parsons at planned strong investment management to learn more call 888. 9727526. Hiring the right advisor could be your best investment that's 888972. Plan. Or visit planned strong dot com. Securities and investment advisory services offered through next financial grouping member farmer SIPC plans to investment management is not an affiliate of next financial grouping and is located at 980 Washington street Dedham mass. I. Okay. Okay. The movement from. It's less drug financial performance under whose skin color very. Paul Parsons is with these president of planned strong investment management. He didn't hurt so shall we you know did you I'm not too badly you know always had to do was make sure idea I got out there and use my legs yes and that I like this heavy stuff you know last year we had all that light the lights off Colorado snow yeah I know this is a little glass says this is real Lewin group's original trees down in your neighborhood a branch of the Green Zone waited out. Yeah this is actually the first chance I. When we get it may be three years ago I got back home generator all right that gas fired home generator. That soccer man only an I don't worry about trees coming down anymore I select the man 'cause. You know we we spent a lot of money on that and it has never been use my wife my wife also the most. Expensive insurance policy right through it to allow our electricity to run consistently or how to speak but it finally did kick in this week I thought I gotta tell you that was a good thing finally forced a little payback figure to get your money's worth in that fifth book all I know that every week you commend with a lot of the business news stories to discuss that affect investors and right I think we're probably wanna start off with almost playing in the stock market to us right now what's going on yet not yet another roller coaster week we got sound familiar as a you know. It it it just is amazing to me to see how much volatility spin in knee in the US stock market this week but. Before you think it's too much I actually won at that I would do little analysis this week. Did try to get people a feel for first the ball. Why did he feel like things are a bit crazy in the markets these days. But then I wanted to compare to what real craziness feels OK so. Is speaking of volatility I took a look at the number of days that had big and I define that is 1% bolts. Upper down days in the S&P 500 index which is you know was the stocks of a group of 500 largest publicly traded companies US. In 2015. And so far this year and 2016. Now there's a reason that investors are fatigued. Can I tell you that you're around I'm verifying your feelings at this point receipt or is it just fatigue I think it's fatigue that so far in 2016 at least I did this through Wednesday at this past week. The market has been up about 20% of the time and down about 40% of the time. So in other words 60%. Of the time. The market has had has had daily moves of 1% or greater are no wonder you're exhaust and by the way. Lot and twice as many of them are down that not okay so there's a reason that your your you don't like volatility. And there's a lot of it that's certainly can be unsubstantiated with the stats for year to date. Now what I vendor it was a compared to the 25 team. 2015. About 15%. Of the time the market was up and about 15% of the time the market was down only about 30% of the time and 2015. Was the market. Up or down 1% are more than 30% vs 60%. Twice as Smart is an argument that America. And an era that really tells you. That there's you know that's a lot of volatility okay. The other thing I wanted to mention though was that in spite of vault that you're the biggest op move was in any day. Whether it was 2015 or 2016 them was up 3% and I know you say while 3% more than a day almighty god that's huge that's. 500 points on the Dow that's you know that the these are very very big most. But 3% us 3% okay that's the biggest move that's the extreme. Whether it's a 2015 or the worst day in our best days. Of a 2016 year to date as well not if you wanna talk about real volatility let's talk about what volatility was like. Barack during and the demise of the stock market during the Great Recession. OK you know what that does it build spread was there was plus or minus 10%. But there were days when the stock market went up. Or down. 10%. In a day and what I was just trying to point to hear his. I know this feels like a volatility but they did a lot of volatility but it isn't even close to that order of magnitude. Of that kind of volatility. That we saw during that this style that the Great Recession of by 220082000. And I want to investors to remember that. Com and having said that. Volatility is still unsettling to investors and it is probably one of the most important reasons that investors should hire professional manager for an impact sure investing behavior anyway because. What studies have shown time and time again. Is that volatility prompts investors to make bad decisions at exactly the worst time and you make emotional decisions. Rather than fact based decisions and all has to do would behavioral finance and and literally how do you feel about your securities as opposed to. What is a rational approach to their valuation and and whether or not he should hold on them at that point. About the tenure US treasury. If it hovered around one point 9%. And you know the German ten year or was close to. Point 3% almost an all time low fare and think of that. And the and the reason I bring up the German on bond to yield the ten year yield. On is because. Germans have that as an alternative they can either buy or German bond and get point 3% a year or they can buy a US bond a ten year. And they can get you know one point 9% there's a reason why are interest rates are staying low and one of them certainly is that international. High quality our government bonds. I continue to be very very. Our low yields because of on the quantitative easing programs that are going on in those areas like Europe and Japan. And now the US dollar still strong but it's starting to weaken over wall did not you know why if you think about it it makes Thomas cents. If it looks at we got some economic data this week that I'm about going to second. Not it wasn't very much. Mom in fact it it probably points to the fact that we are not gonna raise interest rates the Fed is not gonna raise interest rates as aggressively as they at least had talked about back in December. Don't forget when we get our first interest rate rise for the first time in 63 years back in December when he fifteen. That that the Fed also at the same times that hey listen guys we are gonna really try to do for. Point 25% increases in the next year already. On it looks like that is less and less likely not all all talk about why that's the case but if the Fed doesn't raise interest rates. Then what it means is there's gonna be less demand for our bonds. And if there's less demand for our bonds that means there's going to be less demand for our currency. If there's less demand for our currency it means the dollar weakens. And other strong currencies gained out that's a sorry for the long explanation but that is why. Armed that that dollar weakened a bit this week compare to the Euro at about a dollar twelve now. Appalled bless several weeks actually the last several months almost a year a year wouldn't argument oil and how bad effects here on and just this last week we saw some big jumps up and down yeah I mean I guess forgetting insulated but at this point out we're certainly getting used to what at this point. You know we're seeing 10% moves in the oil market it in a week which. You know if you're traitor that's terrific but if you're an investor and you're watching CNBC you start to lose your hair very quickly and at least in my case that's not a good thing because some pumped up follicle challenged so. Certainly not my choice but it and let's just talk what this past week west Texas intermediate started the week at 33 box it dropped down to 29 bucks mid week. And there are recovered back to 33 box and on and this was even in spite. Of the greater than expected inventory build in the US. And by the way the amount of oil we have an inventory in the US is at the highest level since the early 1980s. OK there's a lot of excess oil sloshing around out there. Now even though the inventory increase the CIA also forecast that domestic shell supply was going to decline. By a bigger amount in 2016 so finally. The CIA is forecast in the shale will not decrease and as far as how much we actually produce in the United States coming up. Ott and that apple even offset any increase associated with a Ron entering the market wants these sanctions have been lifted. And they start to to output more oil back into the system as well. Now traders continued to act on news. That key OPEC members and Russia. Are finally. Talking about getting to gather and talking about. That limiting supply. That it probably is the biggest reason while we're seeing the price will rebound to some degree this past week. And before we move on to the next point married he. Commend you on your verb choice of sloshing. Did you write down oil asks wash but that's what royal does it ducked it definitely does in this environment that. And that this move to the GDP and I want to address them before we have to some of the current number. Oh that's right Kenny last week. It was reported that the economy grew an an annualized rate of point 7%. In Q4. Vs the prior quarter. And it showed real growth of about one point 8%. You know year old for a year in other words vs the same quarter a year ago. Op that's not really great news and that is our rules you know somewhat of a slowing of our economic growth in the United States the concerning aspect. Is the declining rate from quarter a quarter. And oil prices and exports from the US clearly are waiting heavily on US GDP growth. And what this report did was it added fuel to the concern that our economy the world's largest economy. Had an increase probability of going into recession in the next two years off from 15%. Up to about 20%. Having said that I've seen many surveys that give virtually no probability of success of op of going into recession. In 2016. But it does add some uncertainty when you see that in fact our economic growth did slow in Q4 of 2015. Problem we come back you're going to address the jobs report the employment numbers big numbers things we don't gamble effect. Our economy going forward investors should be paying attention to this sets when we return its planned strong financial form. This is tall Parsons president of planned strong investment management. And you're listening to them plans strong financial forum on WRKO. Boston's talk station. If you like what you hear on our show and watch need to take a look at your investments and retirement plan called my office at 80889727526. That's 888972. Plan. Securities and investment advisory services opportunity financial group member to go as I can sequester investment management is an affiliate business financial group thinks is located in Washington street diplomats includes six. Hi this is on he Nelson. If you're fifty or older here's a suggestion. Commit to getting your financial house in order over the years you worked hard took chances made sacrifices. And built up as much wealth as possible so you'd never run out of money and retirement. Well now it's time to get organized and to make sure you have a financial plan will protect your retirement. If your financial life together. Call Paul Parsons at planned strong investment management. Just schedule financial checkup call 8889727526. That's 888972. Plan commit to getting your financial house in order. Call 888972. Plan or vision plan strong dot com. Securities and investment advisory services offered through next financial group pink member former SIPC plans to investment management does not an affiliate of next mention grouping and is located at 980 Washington street to our. It's a whereas presidential forum on your host and curry at the anchor desk Paul Parsons joins me he's president of planned strung investment management. And I were talking about some of the numbers that affect investors before we give back to some of those numbers including the employment report which is important. I just wanted to remind you Paul's two free number if you've recently received dew or you arrested and are in January statement it to you look at it. Once you start breathing again what sorts of cars being again at a regular rate. You may wanna give Paul's office a call that toll free number he DD 89727526. Paul and his team to be happy to sit with you. And to give view an unbiased assessment of your portfolio portfolio review the deputy do therefore you. And also come up with a benchmark that makes sense for you which is something you're probably not getting out once again postal free number. 8889727526. That's AD Dade 972. Plan. Wearing to school I'm going to plans strong dot com and send an email to them all the of the story of the week I guess is that employment report. Yeah that is illegal last week it was GDP this week it was the employment report and you know this is the report that comes out every month that says hey how jobs were added to the economy. In you know the past month. And shorn off this last Friday we got nonfarm payroll like information we added about a 151000. Jobs in January. Which was frankly not that good number and it expecting closer to 18190. 158 isn't great take about this way the average in 2015 was about 220 right you know that this as a soft number I grew up loving those numbers over the 200 yard while we were loving the ones or way up to congress especially. And that was other little troubling aspect of this was that the the December number also was adjusted downward remember that was 292. That was adjusted down to 262 this last week and then like I said discover that their recent month that we just completed January. Was down to a 151. Thousand jobs or attic so you know it's not zero it's not a hundred but it is a 220 year to fifty or more. Are so not a really robust number certainly something for everybody here depending on what you're your ankle is how you view the market I'll talk about that in a second but. In them that the reason this is so important as what people are trying to assess is. Is the US economy slowing can benefit slowing is it slowing fast is it slowing slow what is all the speed I mean because worse you know we've seen some other information out there. Manufacturing data probably the most troubling. That says yeah how we bidding contraction in the manufacturing sector for the last 345 months now. Is this a precursor of other things that are gonna really mean that entering into recession. And that could be a real problem having said that an odd to be the short answer my answers no program I'll we're not entering into recession but are we slow where we are we slowing decelerating a bit compared to where we were last year. Jury's out on that mass we have to see. A couple other things that came out this employment report that were important first of all the unemployment rate lowered. 28 year low of four point 9%. And for once it wasn't because labor participation rate went down. The labor participation rate actually inched up a little bit. So it's that's a batter number. On another thing was that would do a good part this was that average hourly earnings and other ports how much people got paid went up. Point 5% month over month that is very good it. And that was after no increase in December the reason that's important is because. What it's saying is that a labor people are getting paid more. Their wages are going after their wages go up that means typically they're gonna spend more that's gonna go to consumption that's gonna stimulate the economy that's good news. On and so that was a positive part of it sites say the bad part was that the that the number Vance was a bit sub par. But the fact that wages went up. I'm one options substantially. Was a very good news now. Overall bulls or bears could get what they wanted out of this report. Let me giving examples bulls they could interpret this as the woes of the financial markets. Have not bled all over to the job market and the economy right now we've had a pretty rough stock financial market for the last couple months rate. But you know you look at these numbers you don't know those numbers are still reasonably strong. On the other side bears can point to the fact that the 151000. Is below expectations. And below the average number of jobs added per month to 2015 so that's no bargain either and that could certainly in the airport from their perspective confirm a slowdown in the US economy. So you know I think there's something for everybody here as far as what this report could mean. Frankly I think it's incredibly important to see what happens. In fact with the February jobs report because we have to see is this trend is this just a little ball blip for the month of January after had a very strong December. That's what we really have to see. Having said all that I do wanna add one other comment that was the Wall Street Journal had a terrific editorial. A buyout. Armed you know policy and the implications the policy and they frankly they're blaming some of the fact that. We're not adding as many jobs but the jobs were at were seeing wages go up but that they're saying hey this is not a some of this cast to be the result of this. Mandatory. Increased minimum wage. And you know two to quote Nancy Pelosi remember what she said elections have consequences from well you know policy has consequences to. And the policy change of you know forcing employers to raise their minimum wage what's gonna happen is gonna add fewer people in your Pam Moore. Okay and it's not that you can add the same number of people and you're gonna pay him more. This is just simple economics. I and so we know this is not surprising to see that were were starting to see this phenomenon and you know it's not necessarily in the best interest of job growth at this point. Right no doubt what does the fitted seat and receive these numbers Paul what are they looking for an enemy responds well if you if you look at this and if you look at all the other data that came out that you know this week in and prior weeks and we got everything from. A the most important metric that the Fed looks act for inflation is called the PCE the personal consumption expenditure. Price index. I and it and it came in pretty long haul it was not a terribly you know good number the Fed is looking for something closer to 2% it didn't hit that. That's not necessarily good number on the other hand motor vehicle sales came out that this last week they were pretty good canine at seventeen point six million on an annualized basis. That's pretty good and in other bunch other things that came up right I just want to summarize them really into a few points first. Income is increasing for consumers but they're not spending a lot of the increase other than on carts. Leading to muted economic growth OK so that's the first thing do gooders is incomes going up but it's not translating into spending. Second think manufacturing continues to be a growth concern that's a problem for me construction spending stewing OK but not great. And now services are even starting to slow show slowing growth. Services. Is the up and coming you know big guy in the market in the United States these days if that sector starts to slow. Now you have more gas on the fire than men in this economy really is slowing. I talked about the jobs market the jobs markets pretty strong. And although February guy numbers will be extra important because we have to see what do these January numbers really mean. On and I will be really interested to see that I think that's going to be probably we're the most important because as you work armor to last week. I talked about our indicators of of coming recessions and by far and away the best indicator. Upcoming recessions is the labor market and sell if the labor market starts to soften up and softened up appreciable Lee well then you gotta read you you may have a real problem. Recession the right to folks who did this last week reduce say that's that's the one thing that right now still this very strong correct in this number might be the first. A crack in that could we'll have to see it's not a terrible number but it's just not a great number either and you know what it means. These stats don't support. Meaningful tightening fad that's the most important thing for a okay. The bond at the same time the data isn't bad enough for the Fed to keep monetary policy ought you know keeping the economy on life support. And so I think there's going to be some saw some normalization of rates this year but I don't think it's going to be certainly a big increase. And I'm thank and it's somewhere in the you know half a percent range for all of 2016 assuming. That my read of the economies right and that is I think it's it's eight and continues to be a slow expansion. Not a great expansion not a terrible expansion but a slow continuing expansion in the United States. And we're you know frankly what we've been doing is weathering the storm around I do need to priest and depressed. Oil and energy earnings and we're just starting to turn the corner on that now. Speaking of the Fed they're good couple of influential investment professionals talked about. You know what I agree wit that you know the chief economist at both Goldman Sachs and Pimco to incredibly important investment firms in the United States. Both think. That the bond traders are underestimating how much rates are gonna Glock in 2016. And the way he could tell lettuce by looking at Fed Funds futures. And what we're seeing right now is there's only up 40% probability of any rate increase. In by the end of 2016 and priced into the market in SI said to you I'm on my read is. They have to normalized reeks to wade agree and it goes back not to always economy strong enough to support. Rate increase is it's that and I look at a kind of the opposite way. I look at it is is the economy so bad. That they can't to normalize rates. And I think that the economy isn't so bad that they can't continue to normalize rates to a degree. Now the economy in my opinion it's all a bit soft or. Then when they made those prognostications. At the end of December. But I think. I can sort of you know what they said there were raised rates by 1% I can see the raising rates by half a percent I'd during this year olds earning seasons so we're hearing from some big companies and ExxonMobil surprised us a little bit yet they actually had better than expected earnings this past week and by the way the stock is performed quite well compared to the S&P 500. Over the past couple months I don't know everybody recognizes that. You know just for Tibet during that time the general market indexes down 9%. While Exxon is only down 3%. OK and other large vertically integrated energy firms are down as much or more than the market during the same times you might civil what's going on with the ExxonMobil. Couple things one don't forget ExxonMobil is financially in the best shape of any energy company. In in the world to the tournament they are still one of just a handful of companies in the in the in the United States that's rated triple eighth. Offered their bond rating in the United States. But what it also reflects is near ability to go win and potentially by some distressed assets on sale. Because as the stock as the energy prices gone down as oil prices have gone down and it's highly likely to see some bankruptcies or some takeovers. Well you're going to be able if you're financially well off. You're gonna be able to one and swooping in and buy a very nice asset at a very reasonable price and I think that's what the market pricing yet. Well we come back we'll talk about with the election means so far for stocks it's a play as strong financial for this is Paul Parsons president of planned strong investment management. And you're listening to them planned strong financial forum on WRKO. Costs talk stations. If you like what you hear on our show and what you need to take a look at your investments and retirement plan called my office. 889727526. That's 888972. Plant securities and investment advisory services opportunities through two group member to me as I can see Clinton mismanagement and billions of mismanagement ripping Guzman committed any. Zogby Nelson. People use different strategies to acquire enough money for retirement. Some try to do it themselves. Others buy insurance for investment products though sometimes will benefit the seller more than the buyer what makes sense is to hire an advisor with first rate credentials and why do investment management experience. Should have a fiduciary obligation to act in your best interest. And be paid the same amount no matter watcher invested in if these things matter to you. Call Paul Parsons at planned strong investment management to learn more. Call 8889727526. Hiring the right advisor could be your best investment. That's 888972. Plan or vision plan strong dot com. Securities and investment advisory services offered through next financial grouping member Fulmer SIPC plans to investment management is not an affiliate of next mention grouping and is located at 980 Washington street Dedham mass bin. It's a blast struck financial reform I'm your host can Garber at the anchor desk involved Parsons joins me he's president of planned strong investment management. This toll free number once against 8889727526. That's 888972. Planned. We normally into plans strong dot com and of course is September your a lot of folks are calling you false the view their year end statements and. The January street and told January's state reassure her from a very dangerous thing right about now uninteresting and ice were that's my mother used to say if if you don't have something nice to say outstanding at all interest stings a good word here so it very interesting thing volatile doesn't really describe. People usually used also for down yap people don't mind upward volley all the way up being upward is is volatility by the right they don't call it doesn't mean you were flat in my top dog and up market and I'll market caps got Paula you're right volatility pretty means but always down yeah. At the back down a lot these guys are guys and wobbling a lot. We reviewed. Are getting those statements and you wonder what they mean you want him to look a little different give Paula call he's happy to sit down with the ball and his team. And do no obligation portfolio review for and once again ABB 97275. 26 you know one of the things Kenny that will do for people are nice and forgive me if this is being repetitive but. Often what people get on their statement is some sort of indexer indexes that there's roster compare their returns against. But it's almost impossible for most people to figure out what combination of those indexes. Are supposed to use to actually compare. They are performance their actual performance. Two an index performance and usually it's a weighted average of several of those index is sometimes not even all the right indexes are included on this on the sheet might point us this if you want somebody to say hey here's what you majors which you should've made at the same level of risk during that period. We can do that for you we can make it very simple and then wouldn't it was even talked a little bit about. What hurt you what helped you and then what changes we would suggest for your portfolio given where we are today. Read those those. Benchmarks it really if there are just one or two word and all the right ones they're just telling you would you made of what someone else made a path and is not telling you what you should have made collect mechanical postal for a number again eighty Dade 9727526. While we can't go anywhere turn on TV radio newspaper. Without being very aware of or in the middle of an election or oh my goodness. So to love the ads you there are some better ads usually do we get some pretty nasty ads so they are nasty Buddha but they were well produced nationally they are. Really out there elegantly. You know and and it's kind of fun I mean it's Super Bowl season which is always fun to the ads and those are ones I always loved the Budweiser commercial forced scores. Tom but yes some of these aspects tell you Bernie Sanders and I are about is diametrically opposed economically as one can be right. A but having said that I think he's I admire the job he's done with some of those ads they RD breach you date touch you they speak TO. On you know Brett Stevens wrote a really good editorial in the Wall Street Journal com couple like days earlier this week and inept. Are you talked about you know what people didn't understand about Bernie Sanders and is as economic policies and supports him but. Having said that I gotta tell you the guy has a touch as it relates to being able to reach out to people on striking a chord with people you know absolutely and it's funny too that he's the oldest person running but he's giving the younger and younger people behind -- look at look at all people behind these are all college gas you know receiver interest is so what does this election mean for stalks for investors would would shouldn't be looking at well. And the reason I wanted to do this segment was because you know we got through Iowa last week and Iowa you know there are winners and losers and what does it mean and all that and I take a lot of people were trying to digest that was the first time the rubber met the wrote. And we actually got you know results aren't real results that count for presidential primary at this point. And I am I wondered to give people an idea what the market thinks of that so far and more portly what the market is looking for going forward so that. If it doesn't play out this way. Then I think it could mean that you need to consider changing your strategy you're investing strategy. So and by the way. On you know my personal political likes and dislikes have nothing to do with the way I invest. OK well when I invest I'd invest for our clients based on what I think is gonna be at their best interest not on who's you know political ideology rings true to me vs dust. I recognize on one person and a country of 32330. Million people it's unlikely I'm gonna change. The results politically what happens out there but what I can do is control how we invest our clients' money. To do the best given what economic circumstances are gonna happen as a result of a certain candidate winning her lows aren't OK to return so I haven't said that you know for months Wall Street has presume that Hillary's gonna win the entire thing mom okay she is the presumptive favorite. According to Wall Street. To win the presidential election be the first female president in 2070. Okay. Last week's Iowa caucus kinda put ahead a little ranch and and and you know it's no surprise actors some. That Bernie Sanders really came on strong in Iowa and it was essentially a dead heat. And even to the tune that they had a flip coins which. I don't know why you open any time. Let flipping coins and cut counting hanging Chad skill involved I get a little suspicious and let's just call it it let's call it an even draw on and not get into the details because. There had to be some shenanigans someplace. Now Sanders as you know is also heavily favored to win New Hampshire as he should he support Mon guy snacks door global blob but. On that and the real question is can he make marked inroads into the south. When they go do the southern swing and when they do Super Tuesday because if he can actually break in to what has traditionally been Clinton country. On then I would say than the Democrats are really gonna be thinking hard about whether or not Hillary Clinton as a viable candidate. If that happens that's gonna have very much. An impact on stock markets and let me explain you why. First of all. If Sanders ends up winning the democratic nominee the odds go very much in favor of the Republicans at that point and again this isn't Parsons saying what I hope happens. This is literally what Tom is happening in Wall Street what's traced him to Wall Street right now if Sanders really gets a leg up especially down south. Then I think all bets are Roth what it's likely will happen is the Republicans will control both the legislative. And the executive branch and you have to think through what what does that mean as far certain sectors and industries meet on if that were being the case. Now on the Republican side trump has been seen as the front wanna run by Wall Street until has lost Ted Cruz and Iowa. But Ted Cruz isn't trumps problem. Marco Rubio strut is trunks problem. And Marco Rubio had a surprisingly. Close third place finish in Iowa if he does well. In New Hampshire coming up and starts to pick up steam. Then I think frankly that is good bad or for the Republicans are as it relates to how Wall Street views. The reason that's the case is because Wall Street doesn't like surprises they don't like extremes. Extreme left or extreme right they don't like extreme unknowns but the thing about Donald Trump. Well Bernie Sanders is a socialist he's a self proclaimed socialist and and that's about as if you will anti business as you can be right right so that's not gonna be a big hit with Wall Street and it probably he wants that he sent it over I wanna raise taxes. I wanna give more things to people and I'm gonna funded by taxing things more room. Well if he does that what the implication of course is little greatly slow economic growth and I could really hurt a bunch of things. The other extremist trumpet the problem with trump is people don't know what is positions are. Talk about uncertainty. It's not that they think that that they don't like his policies they just don't know what is policies are. But what they've seen is eight troubling lack of consistency with its policies for example. To remember one not that pharmaceutical firm came out and the guy that that the event private equity guy went and bought that pharmaceutical firm and jacked up the price of the the drug ridiculously high thousand dollars for old yeah something ridiculous right. I'm well truck you know Clinton I came out so all that's terrible and we need to do something about that Paula price controls ulta also stuffed. We'll try. Also all om talked about men are doing something with price controls is or not and so many words but he said. That he wanted to see more negotiations. Occurring with Medicare. Would drug companies you know that was certainly a big concern to drug companies and then you hear or you don't talk about tariffs with China is say away hit it a minute. Tariffs would China could greatly slow down our interaction where that country and frankly could adversely impact our economic growth this well whether it's Clinton. Or rubio both of them represented pretty much known quantities in the political spectrum and most importantly. What they would do them with their policies and how would impact. On economically. The country and certain sectors. And so with that in mind. I wanted to go through a couple of sectors that clearly are are are gonna be places to watch him. First one is Biotech Biotech has fallen about 30% since September since we had that issue with with the Clinton. And as a also mentioned trop. What it means is if either of those two gay it and then that could be a problem for Biotech and for farm all wrong. If if Sanders Clinton or trump don't get it and then it's better for Biotech and pharma. Bank stocks are down substantially this year at least in part because Democrats continue to call for more regulation of the financial industry. And and whether it's Hillary or Sanders on either one of them are probably not good for the banking sector. On energy and climate change Sanders has argued against fossil fuels subsidies offshore oil drilling pipeline projects natural gas. What he wants us do other than maybe you'll burn a campfire out bad. But if if that's the case stack to be a real problem. For the energy industry and and specifically certainly fracking and coal and you know picks up right. And I and then finally info tech stocks could see increased interest. As candidates from all sides focus on cyber security I say got a bit tongue in cheek. Given the fact that it's it's possible even probable but Hillary. Will be indicted. For using a personal server that could've been subject to cyber security problems. But it it does mean. That there will be I think continued interest in the government in no matter who wins. In cyber security in the info tax base to Paul what does it all means that ports well in short what it means is all of these interactions. Are creating uncertainty right now. That uncertainties Gunner. Frankly fuel volatility for awhile. Until the mainstream candidates emerged and if they truly are mainstream candidates for both the Republicans and the Democrats. I think that's when you're gonna see market volatility declined quite a bit you're gonna really have a better feel for which sectors could benefit and not benefit based on who looks likely to win. Sure will be looking at the election process more Paula going forward with the next few months thanks so much for being here today we'll see you next week sounds great it's a plans drawn financial forum this is. All Parsons president of planned strong investment management. And you're listening to them plans strong financial forum on WRKO. Boston's talk stations. If you like what you hear on our show and what I need to take a look at your investments and retirement plan called my office of EDD 897275260. That's 888972. Plan. Securities and investment advisory services offered through metro metro group member to go as I can see classroom investment management is an affiliate of mismanagement grouping that is located in Washington street domestically and six. Castro investment management is located at nine meaty Washington street Dedham mass or to go to six and to be reached at 889727526. Securities investment advisory services offered through next financial group rank number fender SIPC -- investment management has not affiliate of Dutch financial group think this radio show is for informational purposes only and is not a solicitation recommendation that any particular investor should purchase or sell any particular security. The information contained herein is obtained from sources believed to be reliable but its accuracy and completeness or not guaranteed neater next financial groupings nor represented to provide started.