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Beacon Wealth Management CEO Mark Germain on why investors need to have realistic expectations about the gains, as well as risks, in the markets.
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Our exclusive segment worth -- where we bring you investment tips and advice from some of America's top money managers featured.
-- worth magazine with us now Marc -- CEO bacon wealth management mark welcome to the show.
-- -- really well right now do you fill that there's a lot of pressure more pressure on you as as a professional money manager.
When -- market's going up like this are people on realistic about the returns in.
How do you react to.
Well that's that's a great question thanks for having me and because a -- talking -- at this clients always wanna be in the market when it's doing great.
Right never -- -- be in the market when it's going down and they can't understand how you could possibly have anything in the market when it's going down.
So yes there really is a tendency to have unrealistic expectations.
But we do -- all clients is try to set the bar.
As to what is realistic.
Going -- What what is realistic -- on that -- what is realistic and by the way.
You know I have people start ministries -- Charlie and I made a lot of money on this particular Osaka about its stock they went from a dollar to three.
As this great fantastic but did you ever consider the risk now when you don't -- people with the least the million dollars that let's play.
A bigger role with respect to how they want to approach its market.
I think it's important and it is that you hit on something that that is critical with people is that they don't recognize.
What the risk.
And the volatility of one investment.
Vs is another risk so explaining to them that the market has a risk level of want this security -- a risk level of two.
Means it's twice as risky as the market are you willing to take that risk so in our portfolios what we deal on a quarterly basis as we -- the client.
What -- risk relative to the market.
And that allows them to understand.
If they did a little bit less than the market well I was less risky environment.
Mark them.
However people want.
To grab the easy money when they -- and so they want to most return for the least amount of risk is there such a -- that still exists is their money on the table still to be had.
You know we seen the best five weeks we've seen it you know all year much less the best start see the markets in and many decades.
Well I would like to have bought apple at 475.
And everyone would like 200 -- as you know we had we had clients that had that 200 it -- they're saying -- 600 so.
Yes -- there's always opportunities in the market there's always a plan.
And clearly when you take a look at what happened towards the end of last year.
Starting to make the move back into emerging markets was clear that there was an opportunity via energy.
So what is jumping out -- you right now then what is jumping out is as an opportunity M that is there's money to be made.
There certainly is in the last few weeks getting back into Latin America and riding even the and in the from a risk perspective riding consumer Staples.
Clearly as an economy expands on the middle class sector.
Consumer Staples are gonna go -- well they were down in in Brazil so we bought.
Now speaking of risk last year everyone -- -- bonds that piled in to utility stocks they actually did very well.
Is there need to be you know that the do we do they need to stay in those particular areas are you are you guys started to come out of those.
Just a little bit it's one of the things you have to really look at is volatility.
So volatility is now -- an extremely low point.
Those securities that you talked about our defensive securities -- so utilities -- defensive -- your belief that volatility is not coming back.
-- it's not coming back then you should toss those decider well it might deplete his volatilities absolutely coming back.
Volatility.
Is mean -- And it's low now.
Which means it is going to come back to its average so volatility is coming -- under -- ago but are you suggesting -- some this is a false sense of security -- right now.
I don't know that's a false sense of security I think it.
If you think of the market is a secular bull market.
You're going to have periods up.
Down end -- And the key that our clients look for is can you make sure that where -- was last year I'm not going to be less next year.
Capital -- market saying -- wealth management thank you very much we appreciate.
