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Bryn Mawr Trust Wealth Management Investment Advisor Eric Thorne on how negativity and fear can create buying opportunities in the markets.
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Story so let's get to Eric -- once again ease back come laying out what he thinks every investor.
On his or her radar we have some very Smart sophisticated investors watching right now what do they need to focus on here to be successful with their portfolios.
Well let's not forget that the markets themselves are really ultimate leading indicators to pay very close attention.
To the markets to the riskier parts of the market it's especially like the small cap and mid cap stocks.
As the news flow comes out about Greece says -- -- -- comes out about the rest of the year up in the debt problems here in the US.
Watch the reaction in the small and mid cap stocks any wild gyrations are gonna tell you a lot about how investors are -- right.
Right -- 200 down a hundred right that's wild gyrations how -- -- leadership and that kind of theory.
Mixed message picture well the beauty of that -- is that it's telling us how much uncertainty there is out there how much negativity.
Negativity and uncertainty typically for us are a nice buy signal and the reason I say that.
Is because when people are negative when investors are scared typically -- things tend to fall in the place.
That will ultimately drive the markets higher and the new wanna be paring back positions when everybody gets comfortable that but so Eric like sphere he likes that atmosphere because he finds more opportunity there of what specifically do you look at for volatility to get some funds -- -- -- Yeah we we look a lot at the small cap funds we also had our portfolios very well in terms of you know using long short funds were appropriate.
So you know we need to be watching the the IJA -- is the mid cap by chair of the IW and it's a small cap -- share.
But pay very close attention to the way we're working in terms of strategy within the overall portfolio so you know as -- -- comes out it's going to be very interesting to see we think the negativity in the fear is actually gonna play into a good market pattern here over the next few we.
And out of Russell which is just -- so -- -- Russell 2000 is the small and mid cap stocks up really outperforming.
To both the up -- the downside but here he wouldn't be buying it at the highs of the session.
Probably more -- rather.
Probably not but remember that those parts of the market got hit very very hard during the third quarter.
So even though they did well during October.
They're still at relatively low levels so we may stay at the start that you know on a down day here and there start to repurchase those kinds of shares -- sparkled off one of these people gets all excited about the dividend party train all by the -- just because it has a great yields.
We really don't yields important it's it's one part of the portfolio but you know people will go overboard.
The buy something with a 4% yield and then watching good down 10% short really looking at total return.
This deal plus appreciation is what you really care about so dividends in -- -- themselves are good positive sign that capitalism K with the company.
But sometimes it doesn't say a lot about you know overall performance you know during the course of the year for a couple you Eric still has some more names coming.
