Fox Business
Expand
Browse All Video
Watch Live

You're watching...

Manic Markets Confusing Investors

Details

  • Description

    Penn Financial CEO Matt McCall on how investors should handle the volatility in the markets.

  • Duration 4:19
  • Date

Clips

Also in this playlist...

Latest Video

Auto-advance: ON

Auto-advance
View All

Transcript

This transcript is automatically generated

Well stocks have been hitting highs what should be your next move is an individual investor are we simply in another bubble.

Matt McCall is CEO and financial groups out yesterday that fantastic day kind of mixed today let me -- is looking at these markets and saying.

Okay what do I do where we go from here.

It's a great question is what happened I notice yesterday my clients is people milling around -- market.

People are ready jump back in the two -- one harbors to invest in stocks nothing was wrong it was sunny New York I was loving life.

Today we -- down a little bit -- that deduction of closing ups lately.

Also they felt lift the mood change completely did a 180 people are saying oh my god I can't buyer's market now let's run too much I mean that the -- and it's.

There manic right now -- don't know what to do from day to day and I wrote a little piece about that after the market that.

People -- now are basing their long term 1020 years out what happens day -- day it is not the way to be doing it.

He can't be doing that now -- so what should you be looking at you know I was I was looking at price earnings ratios on the S&P 500.

These stocks are cheap I mean if you look at their price compared to their earnings which is one way to estimate are they too expensive.

Hey I gotta tell you these stocks -- ready to buy.

They do have you know very attractive right now they take -- what happened the last few years and just look at the valuation the S&P 500 vs historically where it's been.

It would be flashing by by by right now it really is extremely attractive it I think the S&P goes around 1550.

And that -- -- here's another 160 points or so -- mean that's another big move that we can get about twelve or 13% I think that can happen.

The next couple of months to be voting -- 10% so far this year -- As -- you wanna be of stocks right now and yet to ask yourself if I'm not going to be in stocks now when will it be in stocks because what -- valuations that they're giving you you have to be in them.

-- you and I talk about this a lot that individual investors are so wary of stocks and so worried because they've had such a bad experience for ten years but remember.

If you bought -- cheap now how was your time alright.

Yet you that now is -- time and look back 2008 the NASDAQ which a lot of tech stocks hitting it and its highest level going back to 2000.

Well back in 2000 look at the valuation stocks about five times what they were now so.

I -- -- I hear this compares -- compares well it seemed to bubble that we had a 2000.

No we're not allow these companies are well off the -- -- still a long way to go.

But we have seen a lot of volatility over the last year remember we have these big swings -- the Dow was really scary -- Producing more than yeah I think we've got bit complacent really seen you know -- until last week.

The market would just kind of moving little by little on routes look that we had the worst day that we've had all year thing yesterday -- the best thing we've had all year I think we could expect more than they hate -- say that but.

Again but investors from data day came basing decisions on the fact that -- -- -- -- a big up day one big -- -- look longer term.

I would say the stock markets like a mood -- it just depends on how traders are -- -- that some guys sometimes happy sometimes they're not.

I wanna talk a little bit about yesterday's stress tests though the banks -- I know a lot of people out there really don't know what to make it it.

We get some banks they will we had one bank's Citi say we didn't -- we just didn't passed that test administered by the Federal Reserve what are people to make of this.

Yeah I think it was actually pretty darn positive we have eventually run up in anticipation.

Of a lot of them passing it at all but -- did pass a stress test.

Then yesterday -- the news came out JPMorgan can -- before the balance that.

We're gonna raise their dividend and buyback some of our shares which is very positive stock rally 7% I do -- shares that's a fair disclosure.

I would love the fact that.

Now the banks are able to start hiking dividends now JPMorgan now yields two point 8% dividend yield that's vs 2.2 percent on the ten year -- so.

It now what's attractive for -- income investors back in the day people by the banks to get income.

No other able to pay out that dividend get it gives you one more reason buying the banks we talk about valuation valuation wise banks are very cheap here.

But again how does black cloud of Europe -- the next financial debacle we had the op Ed piece today about Goldman Sachs -- into that.

-- the industry so -- there's if people still view the bank says that what's your single best idea.

A single best idea right now Wellington is Timberland stocks -- they're not.

They think inflation is gonna be huge and the best place to -- deflation is going -- land PCL's symbol Plum Creek Timber it's -- -- -- huge dividends left -- I do not yet I'm looking to get and that's -- making for little pullback has market at thanks for help to it's always interesting to talk to you thanks to.

Load More