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Tactical Allocation Group CIO Paul Simon on why his firm is taking a defensive investment strategy.
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-- apple at the moment are.
Let's talk about where to invest right now and we talked a lot about yesterday the people who were getting completely out of equities and going in that.
To cash and bonds is it too early for you to do that we're joined now by Paul Simon -- tactical.
Allocation group and he's the chief investment officer all right good to see Paul thank you have an easy thing to happen -- -- out of equities entirely.
Not completely -- -- at a minimum equity allocations right now on our portfolios we came in that position at the beginning of the week in the year or will more than likely gonna continue that route for the time getting you don't think coming in at the beginning of this week this too late.
Now now sold though into a down market is not a big no no.
While we were we were pretty defense -- -- come into it commended the this period this week but we've not even lower equity allocations.
At the end -- lastly just because we think the downside is still.
Pretty prevalent and as a result we just think right now the term that we was in -- -- small ball and it's not a time to reach for risk we really wanna be defensive.
And now we think they'll be better opportunities we've got a very high cash position.
Quitting gold makes sense and that to be -- on equities you wanna be in large cap growth stocks.
Our emerging markets well let me let me take -- one and it's not number one about your biggest position is cash.
Yes.
What are you going to look forward to trigger that to put it to work well it really depends -- it depends on the context it is if it's death by a thousand cuts.
And the market declines very slowly over time we may not get the opportunity that we're looking for.
For a couple of quarters if you get a waterfall decline which is very possible where you get at an accelerated move to the downside.
You could start to get very attractive valuations -- a very short term.
So it really depends on the context of the client how rapid -- we like Kevin the gun powder -- right now just take advantage of what we think is gonna be downside.
And then what will you buy once that happens in and can you position yourself in large caps at this point.
Just to be ready for that or is that still keep -- powder dry cat.
Well we are in large caps already com and what we would probably do at that point is moving and to the emerging market debt mid cap space in in the US mid cap stocks so we moved down a little bit capitalization take advantage of growing a higher growing companies.
So not necessarily all large cap and how would you do that with the Russell 1000 as a regular we would use an index or any TF that -- track an index that we would don't know the Russell midcap growth index of the Russell 2000 growth -- -- And in an emerging markets there's an emerging market midcap index that we would use NE TF.
We'll talk more about emerging markets coming up because.
Paul definitely feels that there are opportunities there but that's pretty broad definition so -- drill down a little bit more and talk to -- just a minute so.
