You're watching...
Invesco Portfolio Manager Tyler Dann on how to prepare your portfolio for the potential risks of a downturn in the markets.
Also in this playlist...
Auto-advance: ON
Auto-advance
This transcript is automatically generated
Well despite the recent rally efforts guest says -- you shouldn't make sure your portfolio is positioned it for a downturn joining us now is -- again portfolio manager.
For invesco charter finance highly aren't like your approach -- believer in the strength in this market that you think that there's also room.
For cautious -- -- exactly what your positioning for when it comes to downside risk.
Cheryl thank you -- I think look what we've gone through for the past three year period or even the last five months of has been an extraordinary rally.
The markets are up well over a 100% over three years and and they're up almost 30% since the October lows so.
I think it is very prudent to to take care of the portfolio and and current stocks that have done well.
And maybe buy stocks -- haven't.
And so what are some of the stocks that haven't done so well that are -- buying opportunity right now that you're looking for.
Yeah I think what our approach is is to -- try to identify the disconnect in the market so so companies that are.
Otherwise strong companies facing good businesses that are -- price somehow.
So -- areas -- were thinking about better are possibly worthy of investment are are areas like gold miners.
We -- one in particular Agnico-Eagle mines which.
You know has really not participated in the gold price move at all.
Part of it is self inflicted they've had some minor issues and and some write downs of facilities but but we think -- going forward the company's reset expectations and and actually the stocks worth a lot more than and is today.
Let me Kevin you really quickly Tyler I know -- dead the gold miners haven't been a lot weaker than the underlying current that commodity the underlying gold asset -- so why it's kind of minor risen and maybe not a fan of gold as a as a commodity.
While I think that there's always that.
Question mark of do you want -- just on the commodity or or do you wanna on the miners and I think that from time to time.
One might be better than the other at this point I think the sentiment on the miners.
Has been that costs are rising and it's harder to get the gold out of the ground.
And I think that's been reflected in the share prices and so that's why we think there's an opportunity there.
Tyler you know you just talked about -- cards in question marks another few things that you are concerned about.
The tax code oil prices Europe China.
How how much should we weigh in what are the actual risk.
From -- all these different things.
-- I I think that the risk firstly on the on the tax code is is that there it's going to be a drag on the economy if if this the removal of what I would call fiscal stimulus is is is goes out of the economy so.
It hasn't been a one for one benefit.
So it probably won't be a one for one outflow from the economy but the numbers are that if you if you take attacks go back to the way it was.
It's a four -- 500 billion dollar dragon economy that's up says it's over 3% of the -- GDP.
And -- certainly there are other areas as well I mean profit margins.
Are near all time highs are certainly forty year highs and and companies haven't been -- investing in their business to grow revenues.
When they do perhaps those expectations -- margins come down.
Well -- it is I wanna jump there because you you know you like is sort of a contrarian in the sense that.
This is become something of a momentum market in the feels like -- you by yesterday's winner you'll make money out today or tomorrow.
And you're saying okay by the laggards -- by the same token.
You want people to sort of clean up their portfolio.
How do you people to do that the sort of sell the stocks are galloping -- by the ones that haven't participated yet.
We'll know that that's the toughest thing to do is is to be prudent about about -- trimming some of your winners and and buying some laggards.
So I mean as where we're doing that on behalf of the clients that invest in the in the invesco charter funds.
That's how we build our process -- that's our objective is to try to.
To not overly participate when things are great.
But help protect on the way down we think that buying.
Buying laggards can can help do that.
I know Tyler that you see some laggards in both the pharmaceutical and oil service is oilfield services industries what exactly or look are you looking to scoop up.
Sure was in oilfield services it's actually -- fairly similar story today out of gold miners where you've had.
-- the oil commodity has rallied very significantly over the last five years.
And these stocks generally have have lagged now part of part of that is because natural gas prices have fallen.
But activity levels globally have risen a lot so we think one company that again has had some self inflicted issues.
And and is certainly under earning compared to where did is Weatherford International so again it's a stock that we think is trading.
At a good multiple good -- low multiple of of -- of mid cycle may be even a little bit lower than mid cycle expectations.
-- again and -- thank you very much for joining us today.
Thank you.
