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Bulls & Bears panel on the market selloff and whether investors should stay in equities.
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Time -- seen this happen before you've seen this rush to the panic button every single one of -- -- -- -- -- was -- even Newmont Mining by the way ended up down today Tom.
So that fact alone you've seen times when every single stock even some -- very good fundamentals are down what does that tell you.
That we -- situation.
And that investors are being forced out those with we can't.
But that the guest makes made a very important point like -- -- on in that is that it's really about the public sector.
Fannie and Freddie were downgraded guess what that's a public sector -- the treasury treasury was downgraded public sector municipals are going to be downgraded public sector what's not being done rated.
The private sector and I terrific -- -- -- Could I jump in and say that that Berkshire Hathaway and a lot of insurance companies got their outlook downgraded.
From stable to negative we called Warren Buffett He told Fox Business immediately after.
I have is that they're gonna do -- -- insurance companies but there are some that haven't they are only now just the only names that are triple -- rated right now ExxonMobil Microsoft.
Johnson and Johnson and -- So really there aren't that many out there.
What about this -- assets selling in certain funds where they promised in their mandate in their prospectus that they have to hold AAA rated stuff.
Is not part of the selling its not a day that they had a forced asset sale because of what their perspectives says they have to be in.
Absolutely not.
Because you're talking about bond funds that are triple -- nine not the stock funds so I would -- I would disagree with you list the and even if if people were selling because treasuries lost their triple -- status.
Remember that it's just two out of three agencies to hold and as a AAA so technically it's split rated and will remain split rated until all three are on the same page.
Well Bill Stone is that likely to happen are we gonna see another shoe drop whether fit its Fitch or Moody's says do the same thing as He did.
You know it's really hard to say but IE I don't anticipated necessarily in in the short term I think you have to be prepared that it may happen you know we just go back and say.
-- when you look out at the yields in the marketplace the fact is the marketplaces voted.
On what they think is the safer place to be you know you can look out and look at UK yields look at French yields.
And say you know -- -- higher.
Then US yields and yet those -- -- retain their AAA at least according to S&P.
You know again I go back to I'm not so sure that a lot of the sell off.
Though we know maybe it's worried about that the symptoms of of the global our problems are -- this downgrade.
But I think a lot of it's just really again not so much the downgrade directly.
But again just worries about the outlook on the global economy.
Tom you know I I'd love to hear I'll go ahead -- -- I just wanna point out that Friday when the rumors were -- that the charges.
-- going to be downgraded the thirty year bond selloff sold off three and a half points in the ten year was off by I think two and a half points.
Those traders that that sold treasuries short have the come in on Monday and cover those shorts.
Because treasuries treasuries did -- decline in price.
Yields didn't go up and so we have this massive confusing trade that took place in the states.
That I think.
Is more momentum and reversal in terms of getting back to neutral return to certain trading strategies so I wouldn't make a whole lot out of today but I would of looked to what how the market's gonna react.
Post the FOMC meeting when Bernanke gives his Prestowitz.
That is going we got -- -- out what we have just gonna forego that I forgot about that let's get you guys and your opinions.
But we have -- sophisticated.
Polished investor audience here Fox Business.
But it includes.
-- baby boomers the elderly cool are now looking once again at that rehash of 2008 what happened on my portfolio.
What is the best advice you can give them -- and -- -- -- But we have we you know we take care of our clients left faltering while so we have this dilemma all the time and what we always look at is.
You have to take action before your emotions kick in and -- good decisions I'm not made.
In that in a stressful environment and so the most important thing you can do to say.
How what am I going to behave and what is gonna happen to my portfolio before the declines -- cut by a lot about clients have a lot of global investments around the world including commodities including gold.
But most importantly.
Can you have a pot if you portfolio this pro actively managed and so we have -- yes.
Recommended to clients that they think about having an active portion of their portfolio which can -- to cash.
Pro actively because the reality is we've gone through 250% declines in the last ten yes we're in the midst of that ten to 15% decline.
We don't know where we'll stop and as you get close to retirement you simply cannot withstand the time shock.
Of a 25 to thirty -- clients on it.
What you already said you were you removing your portfolio analyst can you talk about emphasis on sectors is there one sector that you favor more than others based on what happened today one sector that we've been.
Looking at in this is not in the stock space this is in the fixed income space we were really hoping for chaotic -- -- and we may be getting it in that is.
We've been looking at distressed municipals we've been looking at low quality municipals as a way of repeating.
What we did in 092000.
Intent and that is we use the mortgage market.
As a way to replicate or improve upon the returns of equities we think that yes to be downgrades in municipals.
And we think that would create the opportunity for equity and fixed income investors just to find a truly battered marketplace.
Failure last night they -- your best idea.
Effect well I think the first one is in on many -- said it here a little bit before.
Is not to let the emotions get the better of the I think you know snapping out in the cash or you know whatever you will.
Treasuries is probably going to be inexpensive proposition in in at least the long run.
In the short run we've kind of talked then I I mentioned it a little bit earlier.
Is a way to take a little volatility got again it's not gonna see the unfortunately from these massive declines.
But in relative terms is Begin to focus on some of these sustainable dividend stocks the high quality.
Again they believe they're still losing in these kind of big markets.
But in every single instance of these big days or even all of last week.
They have performed a bit better so you're you're seeing them at least take a little bit South Korea many many thanks to Bill Stone Thomas a lot of things and Joseph Durant terrific stuff guys thank.
