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Despite one of the worst quarters in three years many strategists are saying that opportunities still exist for the long term in these volatile markets some one of those optimists as mark Manson he's about and the CEO.
-- the money joins us now on -- where are you seeing opportunity right now.
Well when you have a global downturn of the opportunities are global.
Opt for example got out what people think that equities were dead over the last two years ending at 22010.
But a reality if you're invested in emerging markets.
Over 18% per year doing that area where -- where -- and He was flat.
Emerging markets small value over 24%.
So prudent investor right now has got to diversify gas in Europe.
Yes in emerging markets places like China our Taiwan south free up.
In it and realize that when markets drop in the short term it's the fear in the Green.
That just what people you talk about people that state I like -- salads.
People say they think -- they'd like to be long term investors but they're not really they panic in these situations bad thing to do.
Mark you're get you've got thousands and thousands of stocks that you've got your clients invested in right now least 121000 but a lot of those as you say you rightly point out.
Or in emerging markets you gave us three specific ideas just to kind of give our viewers -- sense.
-- where you're putting your your clients' money to work -- one of them was bank of China I thought that was -- can still kind of playing in to that China story despite the fact that there are concerns.
About growth in that country.
That would try is in the emerging markets sector of the portfolio.
Along with countries that most people think about investing like Israel.
I and Malaysia so what happens is you know if you're -- -- be in these parts of the world these well.
Really are developing countries these early countries to a large extent -- -- Just depress their distress and they have a high risk this -- a growth opportunity this is a risk story.
They have a great -- diversification effects vs US stocks.
In historically there they have a higher return.
And what about diversification market you're always talking about this and I know that a lot of average investors of course a panicked over the last Michiko the last quarter -- -- nervous about what their portfolio looks like that you say that at least twenty.
Should be in emerging markets that is very.
Very bullish and aggressive when it comes to emerging markets even if you look at MSCI for example.
The emerging market index that that that -- to me for this year is actually had a lot of volatile these wealthier still selling us.
Yeah we actually have twenty to 40% international.
And how that international about ten to 15% of that portion.
Is in the emerging markets so international yeah people are panicked right now about Europe you know this Greece thing look at the silver lining here there's been over 75 defaults from countries over the last hundred years.
And and it's gonna have.
Happen they're going to go under it's pretty much a foregone conclusion.
But in reality.
The market prices for list.
And this risk is already in the system.
And down long term that's going to be a great -- are so don't forget Europe don't forget emerging markets.
The long term premium for equities is about 6% after inflation.
-- you have to -- you know long term debt 28 billion dollars out of equity mutual funds this quarter patents people don't -- when -- down they panic and.
Get out at Michael -- -- to -- -- -- -- -- Michael -- -- this discussion because if you look at the performance again if you go back to the -- just the S&P.
Investor can't just play these indexes anymore doesn't work they have -- -- build a great buy and hold.
Doesn't work in a modern portfolio theory needs to be tweaked a little bit but.
Manson if I were heard him correctly he's 68%.
In the United States is that true.
That's about right right our.
Of of that equity portions of the portfolio.
It's anywhere from eighty to sixty what we're doing let me answer here's my question which is why -- is that.
Not like these aggressive and have so much United States here's my my peers might be a right now -- investing in blue chip international's here in United States right -- Gap up our right we had better that's -- -- And -- in the here's my question actually -- my question mark -- issue question.
Doctor copper in last two months has gone from 450 pound to almost three dollars a pound.
What does that tell you about the state of the global economy.
It tells you that you're in a very short term window that market saying it will grow out of because 75.
To countries have to fed could be double the thoughts on that there's double counting in there but he's looking long term is not looking short term landmark right mark -- And they look nobody can predict what's gonna happen in the next 40% market movement.
In what you what you look at when you're looking at equities 60% in US but those are also in micro cap and small value stocks not just in the it in large US companies.
And over the last ten years which has been terrible for large US stocks micro caps over 12% per year in this so called lost decade.
So it's not just what country you are it's in what sectors you are how you diversify long term it is because equities were down -- large US stocks in the last ten years doesn't mean they're gonna He had.
And -- -- -- -- gonna get the timing right I mean if you're buying in the fall of 2008 and you think Bernanke is gonna sit on his hands again -- did.
For six months then this might be a very trying to.
And for my telling investors -- -- market timers that.
Yeah and we know we know why we're not we are not meant just twelve years buying hold doesn't work a bit -- that does.
All right mark thank you very much agree if you don't debut on the -- as it categories over the last possibly years He did very well I agree that a march break is AMR presidency you know that's an uneven -- -- -- -- is still up.
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