Aug 28, 2016|
"Smart investing, simplified"
Transcript - Not for consumer use. Robot overlords only. Will not be accurate.
From both plans stroll in the broadcast studios it's good plans from financial forum. We your host. Denver are mirrored bamboo president Roh plans strong investment minimum. Full portions it was time Bruce Morton investing. Symbian phone. And an introvert to being produced along with a full Parsons and that both we've been sitting here all summer long. We see some beautiful days. Just in here we are facing the end of the summer I think it will be good program as we look forward to see what's going on what's coming up what should we be paying attention to. Also look back a little bit because sometimes the so tourism is a funny time for investors stitch. Or is you know there there's the old the saying you know invest in May go way and a you're done that this year you would have found missed out on some nights opportunity both in the stock and the bond markets I mean it really is quite some time. So yeah you're absolutely right it's it's been a very interesting summer not only has been fabulous weather wise for us here in the northeast. But it's frankly been fairer share sailing as it relates to many in the the stock market the bond market as well. I suppose a lot of foolish Paul if you had told them six months ago when we will be riding an all time highs through much of the summer on foolish wouldn't have believed that. I think that's absolutely right I if you look at where the stock market is today the US stock market is today we are just as you said you know skirting all time highs. And you think about where we were in the second week of February. And you know the market was down ten or 12% at that time a lot of people were concerned that Jesus since the beginning of of on you know our recession is this the beginning of a real adjustments down for the market and if if you had gotten out at that time you would have missed out not only on work covering all of your ten or 12% loss of what you would have made an additional 8% to. And I think a lot of people looked at that sort all of them on there's no way that will be able to recover got put in fact that's exactly what's happened. Are so if you are started at the beginning of this year you were in the S&P 500 which is an index of 500 largest publicly traded stocks in the United States. A you'd be up including dividends around 8% year to date and the and that is just really something given the fact that the market was down ten or 12%. The first six weeks career Paul we'll talk about of course what is going on in the darkest blue dress some business stories investor should know above but also. Let's talk a little bit about what. Investors want to do now what they should do now we're at this point it's a kind of unchartered territory. While there's an awful lot of news going on right now and including the fact that on the Fed Chairman Jane. No things are relatively good and their they're certainly not bad enough. A to justify near zero interest rates. And so I think if there's anything we've we've learned from this whole thing is that it's it's highly likely in mind my view. A that the Fed will raise interest rates gradually. I'm you know in than in the near future. I'm at having said that the Fed is still a bootable political creatures not supposed to be but you know it idiots and as a result I doubt that they will raise rates in the September timeframe because that's before the election and you know I think our yell on likes her job and I think the president probably is gonna you know me know may be just coincidentally meet her on the tarmac of an airport or something fresh and suggests that other than just talking about the weather or they may also say jeez I you know. It be nice if we didn't raise rates till after the election and make sure that nothing gets in the way Hillary Clinton becoming the next president. I'm typically. The way it works is this is. On that the fad armed it if they were raise rates before come on election he could erupt. On any kind of recovery and that could hurt the incumbent party so that's that's that this the thinking at this point. I probably agree that I think more importantly if you look at Fed Funds futures. Are they still only ascribe a less than 20% probability that rates will go up in the September timeframe. But they're up over 50%. That there will be a rate increase up by the December meeting. He says something earlier that I think is a different way it looked up looking at something you said. Things are bad enough to be near zero right usual we will look at raising interest rates to slow things down or we don't look at Britney this is kind of looking at from a different angles and. Well there and here's the difference though are typically won the Fed raises rates it's you think of it is raising it from a normal level yeah. On every now they're trying to raise them from an abnormally low level and all their they're not you know you I call it. Frankly not raising rates but trying to have reached recover Barack to. A more healthy level certainly not a level that you would think of as a mom adversely impacting economic growth and here's the difference surged. Studies have been done on this Kenny and you can see graphs on on this its actually pretty easy to see each that until the ten year treasury goes north of 5%. Interest rates. I'm in the economy continues state to expansion. On and only when interest rates go north of 5% on a ten year do you really start to see economic growth actually go negative. And so you know I would say that tell you we a long way to 5% from the tenure right now the that that ten year US treasuries at one point 53%. So that's an awful long way to trying to normalize rates so I think frankly the biggest thing of the fence worried about is trying to it. Normalize rates to some degree so that when the next recession occurs they have a tool available to them because right now they don't right now. They could do one cut on interest rates and that's yet. And then you know there in Eaton then they're done so that this is really around they're trying to normalize rates and that's why it's different than you know who you are thinking of arm oh geez usually don't raise rates until things are overheated drive and it indeed Brittany trying to normalize rates. When things are normal and what the Fed is saying is hey most of our mandates are pretty close to target whether it's unemployment or inflation or GDP growth. So if that's the case shouldn't interest rates be closer to normal as well and I think that's the case they're making to the on the markets overall. Bullets were given what we've seen over the last week or so with the stock markets is served there yes it was pretty flat market this week and the US. As in the beginning and the end of the week or close the same values and doesn't mean it was flat during the week but it we began and ended the week pretty close the same values and like I said year to date US stocks are large cap stocks are up including dividends or 8% year to date. Which you know by August that's a pretty healthy returns were awful lot of people it's certainly didn't expect that at the beginning of the year. And on the international side their op but they're not quite as much stuff about 6%. Not including dividends. But European stocks consider continue to be below where they started the year and certainly below where the they were during the bricks at. And before the bricks so. You know overall it's a stock markets. Whether you're inside the US or outside the US have ever done actually quite well. And what's fascinating about it and talked up some par which are exactly the same time US bonds were also opt. And in fact the US Treasury's pay about one point 53% as I said earlier. And you think about it we started the year 2.2 5% so that means that the price of bonds went up and went up pretty significantly since the the yields came down like that right. Armed and it's very unusual for both stocks and bonds the cedar prices appreciated the same time but as we've explained and prior programs the reason for the artist. Economic growth looks okay and that's what stocks dropped and further our earnings growth is anticipated to be relatively good going forward. But on the other hand our international stocks there are certainly some concerns we've internationally economies and as a result central banks of other economies. Continue to ease in monetary easing action so they're drive zero interest rates weighed down and what that means and is those investors say. I endurance search of a better yield than zero which is what they're getting in their own market. And they can buy US treasury for one point 6% one point 5% say. That's better than zero too that's the driving up the price of our bonds driving down yields of our bonds so that's why both stocks. In bond prices are appreciated now know overall this summer moves in a pretty strong US dollar bill that had weakened somewhat recently would have this week. Yeah it's it's about the same it's strengthened a little bit to the Euro about a dollar thirteen the end about a 101 yen per dollar. And meet a part of that is starting to believe that the Fed will in fact raise rates. I'm because if the Fed does raise rates that means our dollar world gets stronger compared to other currencies especially when you think about both the Euro and the yen and their central banks are doing easing not tightening. And of course oil prices something that you've been following very closely well so if for no other reason I'm first of all I believe that energy prices are are ridiculously subdued I you know certainly in the forty to fifty dollar range per barrel of oil seed in you know is unsustainable and our level of our consumption worldwide on a full cost basis dom and so we're just looking not if but when. Oil prices will recover. And oil prices have recovered nicely this year you Mir called back in February they dropped always to 26 dollars a barrel. And you know at that time people some people were calling for twenty dollars and fifteen dollar barrel on who Goldman Sachs was calling for that for life. And they couldn't have been more wrong are we know we ended were rate now around. Summer turned 47 dollars a barrel for west Texas and 49 barrel off 49 dollars a barrel for Brent crew coach art and and frankly that's pretty much on target was where we thought we would be by the end of this year or so. You know those are relatively strong numbers. Part of the reason that the price of wells back to where it is is on a cut a couple things first of all we've learned that China. Has kind of hit their maximum our oil output and they actually hit it last year how are they produced four point three million barrels per day just to put things in perspective for listeners out there the world consumes about 95 million barrels a day for China opt produces about four point three million barrels per day but here's the funny thing Derek glued demand continues to grow and grow significantly. There last year they consume six point five million barrels per day this year they're good dear consuming seven point five million barrels per day had a C big increase that's twelve or 14% increase in their consumption. So it's funny one of the things that I get questions from our investors on sometimes as well don't you expect our overall demand for oil to go down because after all we're getting more fuel efficient cars and also stuff in the US and it's just. Yeah the US will consume less oil. But China and India and other places with massive populations. Continued to be absolutely grow significantly. Their demand for oil and how will overshadow any savings you'll see in the United States some of the other developed countries the. All we come back we'll look at some of the government economic data that has been really should last week this summer some really important for investors. And movie little deeper into when Janet Yellen had to say in Jackson Hole when we return display a strong financial form. This is tall Parsons president of planned strong investment management. And you're listening to them planned 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 of 80889727526. That's 888972. Plan. Securities and investment advisory services offered through metro metro group member finger as I can see classroom investment management is an affiliate of mismanagement grouping concluded that any Russian diplomats who threw six. Hi this is Bobby 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. You 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 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 group in member tumor SIPC plans to investment management is not an affiliate of next mention grouping and is located at 980 Washington street Dedham mass. OK okay. It's. It's. Crumbled plans strong broadcast studios is the epicenter of journalism's. This is the plan's strong financial forum where Paul portions president of planned stronger investment management. And I'm doing our very dear her desk along with Paul Parsons and we're just saying that. This is the last program lawyers are known technically less in the summer but feels that doesn't really doesn't Labor Day it's hot out there and back in the satellite you know back to school us and we've been at work. All summer I mean it's actually been a great time for us because the you know wanting all talk about is the whacko volatility in the market over the last thirty days suspend the lowest amount of volatility. In the last two decades. Scientists on. Yeah earlier and because it and what volatility is in this case means is. The number of moves on and kick in for example the S&P 500. Of less than point 5% and a day from her and so she moves like that are over the last thirty days and it's actually been an excellent opportunity for us to really assess kind of going for what we're our investment strategies going to be but you know another thing that's kind of interest thing right now candidates were just heating up into the political season. You know every four years we get treated or mistreated for to a presidential election and I have to tell you this one is chest up I can't remember one in this wacky right honestly pat. And and now aren't you've seen this but you know Julian Assange as as as our come out and said he has more leaks you know the Wiki leaks night. He has more leaks that are the most in trusting in serious info yet to come from and so you know at least it's gonna be interest and serve and watch it's going to be a lot of money being thrown around that's for our pen. There's there's this is may be definitely the my earliest in memory and goes back probably 10050 years back when mudslinging was really an art form that it's true I you know I think it really goes back to you know the saying this on Wall Street which is you know if if you want a friend get a dog. Thought not as I should get your politicians probably pretty similar to your friend. Get a four legged one because you are not gonna have any close ones with the rest the people out there helping her now and of course we get closer to reelection we'll talk a bit about what that means you know for investors because it it doesn't can mean a lot I get that question. Lot from our our clients and and on the short answer to so listeners know what I have been saying to our clients. Is that I think either one either Clinton or are trump. I'm frankly might be a little bit better for the economy down our current president has spent at least that's not a lot of warm reading and the kind of rings true to me. Armed Adobe less if you will UT business. Armed but I also see certainly different sectors doing better with one vs the other. I'm you know certainly with a a Clinton presidency you concede health care stocks may be taking it on the nose a little -- you saw what happened this week with the upkeep and bright and mile and not end and her reaction of match I can certainly see some price controls are going in place there or at least an attempt to do so and that could portal little shiver in the old healthcare sector arm I can see defense stocks doing better under trump I think trump has talked about. You know beefing up our military spending and and I know Clinton has said that as well but I think there are trump would probably be even more beneficial out to those defense industries. I and there are a bunch of others that we can talk about a little while but certainly by sector are on there are differences between the two overall although I don't think from the economy overall you know one being better than the other Mike gas is trump may be a little bit better because I think he'd cut tax rates. And traditionally our tax rate cuts. I'm certainly favor a business environment and frankly help the stock market more. There is a promoter listeners move forward move on Paul you're troll free number he DB 9727526. That's EDD 8972. Plan. If you like to sit with Paul and his team for one on one discussion and and you know obligation portfolio review all the more than happy to do that you can schedule. Deployment right now eighty Dade 97275268. BB 972. Plan or go online to plans strong dot com. Anxious to an email and they do get back quickly that we yes I'm hoping you get everybody the day off today as I said yeah I'm over the last weekend in the summer fire you up they'll give you guys jingle back first thing on Monday and happy to schedule point with him so let's look at what we did hear from the government does senate this week in terms of economic data what are we here and why is important. Well us a lot of the day Euro was relatively positive this week and and and I didn't see a whole lot of surprises in that other than one good surprised at all talk about a minute. Com but let me just run through the Dieter really quickly first of all new home sales increased dramatically that's important. On new home sales. Are exactly what that did a you know reflected their name did the sales of homes that are just been built as opposed to existing home sales. And that there are important because if you're selling a lot of these new homes and injure building a lot of these new homes and that's good for the economy and for jobs. I'm so they were up significantly. On up to about 650000. Which is significantly higher than the about half a million we'd been kinda get used to for quite some time. Certainly well below where we word during the housing bubble. But you know much improved over where we bear over the last year or so. On the other hand existing home sales were actually down a little action they were down to an annualized basis of about five point four million were used to about five point six million so that was down just a little bit not so good and especially because prices at the same time have been coming down this well so neither one of those as particularly good news opt for existing home sales. Another not so good piece of news was that crude oil inventories increased this week what that means is if they increase a little but that means the price of Boyle should come down a little bit because you know obviously we have more inventories to be able to bleed into the marketplace. But cures the good news. The good news is that durable goods orders were up strongly in July in this assumption that you when I've been waiting for for quite some time Kenny and it's the second of two months now where we're seeing. A you know much better results and certainly after a very slow first half of the year and durable goods by the way include aircraft and industrial machinery. Which includes like machine tools and robotics equipment all that all those things we saw eight actually a very nice increase. On and it it by the way these are durable goods because they last for at least three years okay a so they're bigger purchase items that are exposed the last three years and what we saw was that orders were about one and a half percent last month. I and the increase was pretty broad including are pretty good increases in demand for business equipment and machinery. So in spite of that good news don't forget though year over year orders are still around so they're up just last month but compared to where we were a year ago we're just we're still not quite back to where we wanted to pay. Okay and initial jobless claims continue to be great you know people just not filing for first time unemployment claims they came under 261000. Certainly alone number. Probably the biggest news other than you'd be yellow press conference on that came up this group this week from that the government. Had to do with the second estimate of Q2 GDP so as you know GDP is announced a with an initial estimate that was done last month then there's a second estimate and then there's a final estimates are actually three versions of let that happen in three months the talk about the prior quarter. I'm Q2 GDP. Was announced for the first time last month to be about one point 2%. The second estimate was just released this week. And it came in at one point 1% so down just a little bit and you might simply that's pretty lousy and especially when you think about Q1 GDP was point 8% in August does not sound like great annualized numbers. For an economy that we'd like to see 22 and a half percent kind of targeted growth right. In fact it was better than the headline number showed because at the exact same time coach there was a big inventory spend down. And so even though more goods more produced more goods were sold. And as a result the inventory spend down our account for about another one point 3% of GDP growth. So if you had the one point 3% to one point 1% that's 2.4 percent growth nine you're definitely in the in the ballpark of where we would hope to see GDP growth on an annualized basis. And by the way household consumption within that GDP growth grew four point 4% on an annualized rate that's a really good number and that's even better than the initial estimate of four point 2%. And one of the things that actually hurt yesterday at the time was the fact that government our growth government spending was actually down more than originally anticipated. And then the other big story that you mentioned Janet Yellen did to mount and speech this week what if anything did we are well and her speech in Jackson Hole us who made the case for re easing US interest rates. And it's strengthened a debt from work span arm over say six months ago. And the reason for that is because of improvements in the labor market and expectations. Are for moderate economic growth. And she said specifically that the US economy was nearing their statutory goals we talked about that just a few minutes ago whether it's unemployment or inflation or GDP growth were getting pretty close to what we're supposed to be kind of aim for and if that's the case. Then you you certainly would want a normalize interest rates if you're hitting your targets. And so she said that future rate increases should be gradual. And as a result you know we're looking at a pretty good probability not for September rate increased by I think certainly would you rate increases starting in the December timeframe that would not be surprising to hold the next story is very related to interest rate increases when you tell us what. I will arm you this is probably a very important story for our listeners to understand and a really important for them to look in their own portfolios. Are and it has a lock to do. Would what are considered safe stocks or traditionally see for stocks. On and and bit unexpected story of this first half of the year has been the incredible performance. Of defensive stocks you know kind of seat for stocks think of electric utility sink of consumer staples. Stocks that traditionally people look at and say oh well you know no matter what the economy does I'm still gonna get my dividend payment on. Even if the market changes a little bit you know Lamar stock market goes up or down hopefully these stocks won't be as impacted us a mother. What's fascinating. Is that these stocks have enjoyed a real big run up in the first half of 2016. And exactly the same time as were also seeing a runner up for example an energy stocks. And so when we come back I'm gonna talk about what investors should know about these because frankly many feel that they've gotten over priced. And when we will bring in the fact that interest rates may rise you may really understand what the riskiest associated with these. Supposedly. Safer stocks over a swimmer returned the unexpected story in the first album of the year to support a strong financial for this as. All Parsons president of planned strong investment management. And you're listening to them planned strong financial forum on WRKO. Boston's talk station. 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 of 80889727526. That's 888972. Plan. Securities and investment advisory services opportunity for me to prevent member today as I can sequester investment management is an affiliate business financial grouping concluded that any Russian diplomats who threw 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 in retirement. Well. Now it's time to get organized and to make sure you have a financial plan. Who protect your retirement. If your financial life together. Call Paul Parsons had planned strong investment management to schedule financial checkup call 888. 9727526. That's 888972. Plan commit to getting your financial house in order. Call 888972. Plan or vision plans strong dot com. Securities and investment advisory services offered through next financial group member and SIPC plans to investment management is not an affiliate of next match grouping chemical can I need to Washington street tournament. Says financial guarantee your signing and be informative. At least it's informative it's black and strong financial forum where bold portions president's bold plans stronger investment management. Oh. Yeah. But I can Burberry and spent the anchor desk along with Paul Parsons and its supplier strong financial form. Before the break we're talking about it and unexpected. Story of the first on the year and and personal Paul why it was an unexpected extra aid these are defensive stocks old reserve buying. Well think of it this way can calm you know when you think about the stock market being up 8% you're Dayton even and I. After an awful for six weeks wrote the market overall was down ten or 12% right from year to date the market is up 8%. Tippett and by the way a big part of that in the first half of the year was safer types stocks have actually done quite well right. Deck the EC stocks don't typically do well while cyclical stocks do well as well I'll look at the same time and so usually it can't think of it this way it's either risk on or risk off so either or you know stocks that are riskier and people say I feel good about the economy I think we're gonna sell more cars I think you know they're gonna be real benefits to more cyclical type stocks and I wanna invest in those kinds of of thing and and east from or they say it all I'm worried. I'd I think the economy's slowing so I think I should invest and see for stocks and bonds. And as I said she with the beginning the program for action a very odd time right now we're both stocks and bonds have performed quite well this year. And the reason for that is while our economic outlook has looked reasonably good in the United States had the exact same time central banks around the world of the north quantitative easing to support other recon east. And as a result the interest rates abnormally low and what does that Don that's driven. Those investors into our markets to buy our bonds and and also frankly for investors to buy our defensive stocks like why. I can buy utility stock that pays a 4% dividend broken by a tenure US treasury pays one and a half percent. Look I know that dividends you know can be canceled I know that the US government is not gonna default on. I you know paying their one point 6%. But geez that premium are overturned that I'm getting there the difference than 4% and one point 6% feels like a pretty good premium for not a lot of risk if I think about the fact that in do you really think Consolidated Edison is not gonna pay their dividends I mean most people know they've been dormant for years and years and haven't decreased under discontinued it or anything else. Looks beatle pretty solid right so that's why investors have been willing to make that trade off from as a result they bid up the price of those and it's specifically because bonds. Have been under price of bonds have been driven up to such heights that there yields are at all time walls and as I said there are our German bonds for example with tenure your stroke you are German treasury right now is paying. Minus. Point you know almost 6% are starting I mean you're you're actually you your being incentive to tend not to nest and right OK and so were they going to buying our bonds instead driving up our prices driving down our yields so having said that. What's happened now is on we've seen this big run. I'm not in the price of Bart defense of stocks dislike the price in the run up among the price of bonds but recently. And it as recently as this week Bloomberg for example reported that sentiment was starting to shift away from these defensive names and it was doing so rapidly. The reason I bring this sop is so many investors are out there that say look I owned the electric utilities and I don't you know Procter & Gamble and Colgate-Palmolive. And a bunch of other really defensive stocks and heal people's pom you know buying of toothpaste shouldn't change whether. The economy's good or bad hopefully right or deodorant or other things like that yet no matter how bad the economy guess please follow the exact way is pleased videos and keep cleans and brushing your cheat drain our will laundry detergent and wherever else re gonna continue to buy those things where. You'd expect on the other hand businesses that sell automobiles or jewelry or vacations you know warships you know Tom cruise lines and that kind of cepheid expect those to be much more cyclical thing or put an end and rightly so but here's the problem at some point if the price of those quote on quote seed stocks gets bid up. So high. They actually risk associated them because. All it takes in this goes back to Janet Yellen now all it takes is an interest rate increase. And all of a sudden you know they can't raise their divot that it's. I'm you know they're paying out dividends but it's unlikely that they want to work hand increased their dividend pay out much at the same time. Competing bonds when interest rates go up all of a sudden new bonds get issued at a higher interest rates. All of a sudden that makes those are existing interest and dividend payments of those stocks look less attractive. And that's why. Any talk about beef and increase interest rates that we just had this past week Janet Yellen in Jackson Hole can apps a little Lee. Impact of the price of these defensive stocks especially. When the defensive stocks have been did opt to un you know until now you are ridiculous lease on for seen heights. Armed and by the way you like I said sentiment is one thing you really wanna watch because when it does change in some cases. It can change very very quickly. And one way you can tell if sentiments changing is to see if people are starting to short the stock and what that means is they actually. Are buying the stock immediately selling it. And then having to not repay by the stock back liter okay. And by doing so what they're hoping for is to be able to pay less for later okay. And so they're hoping that the price of the stock all go down. Well there's actually 810%. Interest. In shorting stocks right now for certain utilities and consumer staples are now the Wall Street Journal. Also had some similar stories. About worrying about overpriced. Seats for stocks if you well and what they were talking about was looking at. I'm not only the amount of investor cash. That had gone into belonged like shares driving up these are stock prices. But they were specifically talking about how our earnings multiples have gotten too ridiculous levels for consumer staples stocks for example and let me just give you one example. You reliever really good company located in Switzerland is is kind of the Procter & Gamble of the rest of the world okay. And you know lever had currently has a price earnings multiple of 28 times earnings and as a consumer staples company this is not you know Amazon. This is eight you know the big deer earnings are not expected to grow whole hackable locked or not gonna sell a lot more crackers and cookies are okay or it's or worst reporter laundry detergent war. You know our chocolate it's OK so when you think about that at with a multiple of 28 that's actually twice they are historical arbor to just gives you an idea. How much these things have been bid up. And another thing and I've talked about how stocks are valued in the past there are valued based on future earnings are gonna discount future earnings. You add them all up together and you say in it too I think today's prices worse that were sat well. You'll Weaver shares are now worrisome for them all the cumulative earnings of the company is made in the last 32 years. Adjusted for inflation aren't OK if so does that Italian maybe either a little bit expensive. And there's one other story that that came out about the risk associated. With these if you will see for types stocks and again I would came from the Wall Street Journal and it it really talked about the fact that who of the best performing strategies this year. Were actually pulling investors. Into if you will the same crowded trade let me talk about the X. One of the strategies. Has to do with the investors that are looking for bond substitutes they're looking for interest payments like they used to get a CD get paid for 5% operating older guys just don't exist any ground right. So what do they do they buy dividend paying stocks that hopefully. Arm have reasonably high dividends and have a reasonably stable stock price that's what they abuse and they bid up the price of the so they're looking for yields but at the same time he also some investors. Who have said you know what I'm really fatiguing from stock market volatility. They saw what happened. I'm in in the last year we've had to 10% plus corrections in the stock market and the city you know what no box I can't take it. I really am interested in owning stocks that have much less volatility. Well frankly. High dividend paying stocks and low volatility stocks actually in many cases. Are the same thing and so what your finding is that these two strategies. Only a lot of the same positions where and so you're seeing because of the fact that you these two if you will marketing techniques to go way after our. Our four to meet the needs of investors there again. Building up the price of the same group of you know handful of these utility and consumer staple and Telecom types stocks that are. Higher yielding and lower volatility. So what should investors be looking out for who formed respond what think probably the most important mission do is pay attention to what's going on with a fat and specifically if and when the Fed is going to raise short term interest rates are. But the other thing they should do. Is they should watch to see what's going on with longer term interest rates probably the best way you can predict what's gonna happen with long term interest rates. Is to watch what happens with the economies of Europe and Japan. If very economies start to improve a pit then it's unlikely that their central banks will continue to use monetary policy as heavily. What that means is they will allow interest rates to to rise on the longer side of the no yield curve as well so. Two things watched the Fed for short term rates and watch what our economic growth looks like in Europe and Japan. For long term rates if either one of those starts to look relatively good that means that these kinds of defensive stocks that are typically considered pretty safe will look a lot less safe and they could really get hurt. Paul when we come back we'll look a little bit more at. Why the stock market has been so quiet this summer and also some business stories that investors need to know it's glass prudential for. 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 do you take a look at your investments and retirement plan called my office of EDD 89727526. 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 groupings is located in Washington street domestically 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 its 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 vision plan strong dot com. Securities and investment advisory services offered through next financial group linked member former SIPC plans to investment management is not an affiliate of next mention grouping and is located and I need to Washington street Dedham mass. Finally your really your show is not trying to show you insurance for a movies. This is the plan's strong financial forum where Paul portions. President Roh plans strong investment. And I didn't curve very healthy anchor desk along with Paul pars. Since London have been talking a lot about what's happened over the last week some business stories coming out. But all we bitch in the beginning of the program that this idea that Tim Welsh farmer did actually have the fact that it was very eerily quiet down and start our real low. If you read very little volatility and as I said I think it's the lowest thirty Dade and most volatility. Of any thirty day period in more than two decades and so you know I don't know about you I welcome that. Because it allowed me to actually do research and not you know have to focus on large moves in the markets on a daily basis. The reason we thought though that it was important for investors to notice as. It's kinda like when you buy insurance for your house you don't look that the price of insurance goes down down down. When their haven't been as that's for awhile right sure resource insurance companies had haven't had the penny hour drive all kinds of claims right well the exact same thing happens and our business there are financial instruments that you can use to if you will not ensure the value of your portfolio. And or any other kind of property casualty insurance only ask for certain period of time and you have to either re opera not well you can do that we have come into financial instruments as well in the marketplace. And the point that I'm trying to make is when volatility is this slow it actually makes that insurance the least expensive sorrow if there ever is a good time to go win and and think about a protective strategies for your portfolio. In an end usual time of few claims a few well around this is yet so that. Are those financial instruments are inordinately cheap right now if you wanna learn more about best call our office would you talked about that. Postal free number heated 9727526. That's 888972. Planned or ignore online. To find strong dot com some other business stories and a lot of business stories actually that we should know about what you don't waste. And an awful lot of time talking about handsets and mobile and an apple tours but we don't want an entity that we haven't talked much about lately is Samsung and and frankly I haven't talked about Samsung for two or three years. Because Samsung had been in the doldrums for two or three years their stock price had been on. And frankly you know kind of the blurb dub Golan no to one from between apple and Samsung. Was fatiguing but it's certainly look like apple was winning the race rate. Not as much lately. I and I wanted to talk about that they've Samsung's been really on a terror and by the way if you're an investor in U wanna invest and Samsung it's not that easy the reason it isn't that easy because they don't have an ADR on on US stock exchanges and so instead you accept abide on the Korean stock exchange itself. And that is part of the reason why US investors are less invested in Samsung bands say some other securities out there. Samsung's stock is up 34%. Year to date and finally is up 24%. And a after a three year battle move OK and just to put that in perspective. During the exact same period of time you know apple has seen its value double over the last barriers but now it's back a bad it's only up about 50%. Over the last three years. Still ahead of Samsung's growth and by the apple is is still from a market capitalization perspective. Three times the size of Sam's sock that is not how huge. Are apple has become but the reason I wanted to talk about this was because Samsung's. Search. In in stock price really has come because their profits have really done well and you might say well why are there wire the year profits up. It's because they really have put together eight greet mobile phone. Right Missouri have a energy you don't well your cure kids are God's image is my kids you know that the younger men in particular. Now solemn pride myself and kind of looks down in my apple has as an old person's own right he says no doubt do you have the big. Cool Sam sorry for what and a bigger is exactly the right burger peace Samsung has really a kind of got a good eye design. For a larger phone and you know what's funny when you take a look at the on the iPhone palm six. Six plus. And you look at how big they are. On they still are not quite as elegant as you might want to do they eat you know and you compare that Samsung. What's Samsung's Don is they've introduced a whole bunch of very cool design features that arm are really becoming attractive in the marketplace they've come out with a new phone called the galaxy note seven. And it's considered by many reviewers to be the best in the industry. And when we talk about a couple of reasons why that's the case it's features. First of all it has glass that goes edge to edge so it doesn't have the little you know black kids that that on the iPhone does it's much much more elegant from that perspective. It has so because of that it has smaller overall dimensions for a big phone because it doesn't have as big edges that go around right. And that means it's easier to put your pockets it's not as you know communal flick your putting it tablet up next to you or your right. It has a stylus that works in the stylus is actually a feature that people really light because it does on our character recognition Smart in part character recognition and see you can convert. What you're writing in to tax and it does it very efficiently certainly much better than you know the initial versions of the software and that. It has a camera that is unbelievably. Good and so you know people use their Cameron or Smartphone it's probably the second or third most used application. On your Smartphone so that's not lost on Samsung they put any great skit com you know us on camera as a result of that. They also have armed. And iris scanner for security so it's not a fingerprint it's not Europe Irish senior I mean I think of that troika out of James Bond film videos and it's a very cool thing we don't have to worry much your thumb for an being you know you know more mass stop and all that other stuff. A the iris scanner is supposedly very very good chip for security very difficult to duplicate. On and very elegant again and it's why don't resist it. So you know I have to from mine are iPhone I have bought out a thing called life proof case. Which is great but you know would it be nice if I didn't have the buying that writers that life proof case. Is actually a little bulky and I and the Samsung you know their water resistance on you don't hear an extra case for that so that's a very very nice feature. And they also of expendable storage something that the apple doesn't have fried rice so you know you look at this list of features you say okay. They've put up a very very nice product. And by the way there aren't very good I'm circumstance. As well because they're also in major. Provider of glass and chaps. Four on the other handset makers and so they're making a lot of money from now on as well and frankly they've got a bit of a captive market from that. So Samsung is accompanying meat beat on not to ignore mead either out of the doldrums a bit certainly something I can't obviously recommended buying or selling it but I would suggest taking a look at it because they're giving apple a good shot for their money Ray Brown ranked above them. Is another story that that I saw it and I definitely want to get to this because it looks like their immediate change. To some of the US state tax rules yeah these are the foreign yeah I it's it's this is really important story and I. I know some listeners may say well only if I had that problem by a perfect you know this impacts on people. Individuals that have assets in excess of five point four million dollars. Awe and couples have access sorry assets in excess try to say that fast three times. Arm of the ten point nine million dollars but for those people and you know when you think about our families that have a couple of homes and you know odd couple 401 k.s to to wage earners maybe they inherited some money may be to have a farm. You know and the value will wall that has gone up dramatically over the years you can hit those levels. But what you know has been used in the past by these wealthier families. Has been armed up all an ability to get valuation. Discounts. In other words what they do was the discount the value. All of mirror. Assets. For the purpose of a state taxation. And here's how they've done it to get these lower valuations what's that the owner of the assets typically does is they put them and holding company. And then what they do is they give pieces of the holding company to family. Okay. Then what they do. I'm beat just because they've put it into this holding company. The asset value drops because the control of the Kennedy is dispersed. So on the assets would be harder to sell you have to get everybody dual grief for example to sell a particular asset write her and because of that. The combined discounts. Can be somewhere between thirty and 50%. Think about that so say you and hurt you you have a farm that's worth ten million dollars. And it and you have. A vacation property worth another five million dollars and your your spouse that's all you have for assets while you can get ten or eleven million dollars through the estate tax. But he's still formally in box sitting out there. What you do what you take all of that fifteen million dollars she put it into company entity and you give each of your three family member shares shouldn't panic. And they each have shares of it automatically does value of that thing just drop by SR OK so instead of it being worth fifteen million. It's now worth ten million. While locked you no longer gonna state tax problem. What's happening is that there are changes that are being proposed for regulations. And that they may allow the IRS to ignore many of the discounts in these animals. And so this is really important for families that have significant assets and it's really important to pay attention to going forward. Well a lot of great information this weekend where I know we have a lot more coming up for next week is well let me just remind folks are beginning to our true view if they want to. Sit down 101 for no obligation portfolio review with Paul and his team. 80889727526. Is the toll free number. ADB nine soon to plan. Or anyone going to plans strong gut common send an email. And does some new era vacuum Monday Paul thank you once again for so much information we'll see you next week sounds great Kenny it support a strong financial four. 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 stations. If you like what you hear on our show and what media take a look at your investments and retirement plan called my office. 80889727526. That's 888972. Plan. Securities and investment advisory services offered through metro metro group member to go as I can sequester investment management is an affiliate of this financial group thinks is located in Washington street in Massachusetts. Castro investment management is located at nine EDU Washington street Dedham mass or to go to six and to be reached at 889727526. Securities and investment advisory services offered through next financial group ranked number fender SIPC classroom investment management has not affiliate next financial grouping 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 and its accuracy and completeness or not guaranteed neater next financial groupings nor represented of provides tactical.