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Stuart Freeman, Wells Fargo Advisors chief equity strategist, weighs in on 2011 market movers, and gives his tips for investing in 2012.
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We'll investors are focused on Europe right now but my next guest says and there's a lot happening on our side of the Atlantic that will provide uncertainty for the markets joining me now mr.
Freeman Wells Fargo advisors chief equity strategist.
And -- -- -- you talking about other factors besides Europe because we are so Europe hear your focus that we.
Hostin miss a lot of important drivers coming.
From the United States directly.
Is volatility in the name of the game as we go into 2012 because when we talk about what's happening here in the United States said -- -- picture isn't looking much prettier.
I think the volatility still going to be an issue in 2012.
We we may not have the the significant pullback that we had during 2011 as investors were.
Many investor are concerned about.
About going into recession at a time when you know they were there were actually aggressively still moving into the marketplace.
After moved up a 100%.
I think.
That the presidential election will have volatility a continuing questions about what's going on in Europe will add volatility and and because we're growing slowly and modest pace.
You know slower than last the average of the last ten cycles -- You know just small changes in oil and currencies are are gonna make the market will more volatile.
Will this doesn't do anything to add to investor confidence I mean how what is your strategy given will -- -- That you saying that volatility is here to stay at least for the next year how wasn't that debt investors should approach to markets if at all.
Well I mean we think they should enemies -- long term investors stocks you know look attractive -- -- didn't come you get no return in the short run in you know of money market vehicles short term vehicles.
In if you have a long term perspective.
You should.
Be accumulating shares you should be using pullbacks in the marketplace.
To it -- to buy stock stocks look like.
Cheaper assets in the in the marketplace at this point.
We're we're particularly interest in this point.
And he's -- balance were were overweights in cyclical areas were underweight others were -- some defensive areas we're underweight others so.
You know we're we're were a little bit overweight industrials basic materials but we're underweight financials and technology.
We're we're overweight utilities and Telecom services we like the yields there there -- vs fixed income.
And that'll help -- volatility little bit but we're a little bit underweight health care and Staples because we still think we're in a recovery.
How vulnerable is -- US economy to dipping into a recession week.
What we see signs of that already happening in Europe there's debates about whether it's in a recession will go into recession austerity doesn't help that case.
Then also overnight this CEO of American Express saying that it won't take a lot to -- the US.
Off course how vulnerable are we.
Well I mean that Europe is certainly important trading.
Partner of ours it's less and -- was twenty years ago.
If they -- -- of a modest recession why I think that we can do continue to grow we see at 35%.
Odds a recession next year here.
You know -- -- -- think it's we we these greater than that.
-- broad the biggest question I think at this point is you know it is Europe is Germany.
And and the rest of -- going to.
Protect the banks.
From whatever recession takes place the united if you know -- put together package -- protect the banks there we don't have a contagion to banks here.
No -- make a huge difference with respect to the impact over here as a modest recession over there should not.
You know be a catastrophic for us here.
That is good news a little bit of optimism on -- -- where we don't have a whole heck of a lot of it there's a lot of uncertainty on the table thank you very much Stuart Freeman.
Wells Fargo advisors chief equity strap.
