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Fort Washington Investment Advisors CIO Nick Sargen on the pullback expected for the markets over the next few months.
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All my next guest says that we should -- use of these stocks being down in fact -- seas of five to 10% market pullback in upcoming months joining me now is nick sergeant CIO.
For Fort Washington investment advisors.
-- you gotta tell you this market we were down 68 came up 45 now we're down -- -- want.
Does this give you more confidence that indeed the market is beginning to buckle down -- just a little bit.
Yeah I think Charles that it I would describe it is I think it we've gone from.
A straight line trend -- for six months and then along comes April and it's been choppy.
And -- I I think that's what you should expect job you know we've had such a big war on us stocks don't go up in a straight -- -- I wanna be clear I'm not bearish.
But I wouldn't be adding to market positions until at least I saw a little bit of a retracement and done you know it could come at any time.
-- -- to give us a firm number five to 10% it doesn't necessarily sound like a lot but.
What gives you confidence that once this market begins that downward slope that it will be able to turn around because you know.
Last year or the year before last -- these -- ran out of -- we sort of the pull back it was the proverbial snowball becoming a boulder.
It exactly correct I guess you know there's a judgment call -- I think what we're starting to see is up after some great employment reports are better than expected you know we got the disappointment.
In March.
And now with the jobless claims slowing you know we might be doing a little bit of payback.
So I'm prepared that maybe there what may be that good numbers were exaggerated to the positive side.
So the basis for the pullback idea is we're just smoothing out now.
If if I was wrong and then something major.
Happens let's say Europe blows up again on us.
Well then you're absolutely correct you could go back into the soup.
But so far even on the European front.
I'd seen.
Some reasons to be cautious but I don't believe we're going back into the battle days of August September October.
You bring up a great point nick that is just about to ask you about the European situation where at me day I guess last year at the end of last here.
We -- still focus more focused on Europe and we were on our own domestic matters but now it seems that it's.
We surging a little bit we have the Spanish debt option that when it well somewhat successfully -- -- and questions about whether France is going to get downgraded again straight you know questions about ties between ECB.
And and Germany.
You know at at at what point does it start to take over -- start to take over again very soon.
Yes and you know I think really the way -- I pretty differentiated is remember last album are fall.
There was a lot of worried that of course Greece heading the list could they default well guess what they defaulted in the world -- come to an end.
So there's part a bit Shibani that's related to can't countries that have big budget deficits in Spain.
Really cut back and not when their economy -- weak.
But I I don't see that's a tough call but Spain is not Greece that's that's the comfort so if you if you say the where my little bit nervous.
It's more in the banking system again you know everybody was feeling good with the long term repurchase operations.
Refining operations.
Because that provided liquidity and that was good it got us through they're not gonna allow Lehman to to happen.
The body is.
That many of these banks.
In Europe need to be recapitalize.
Like the US banks will hand so one more nervous on the banks -- on the government debt.
Yeah and a lot of people -- and naked getting back your point about a correction of five to 10% are you a buyer when we do still see that pullback because a lot of people say even -- they may not buying into that and into that.
Production in the mark.
-- it would duck you know it's the classic story I'd like to set some -- because if you don't.
Then -- you know you you're never you never act.
Up so I'm basically saying at that point I think the market which is fairly valued.
Starts to go to being more underpriced again and we we we're value investors we like to look for bargains.
-- so then the next question is you know why is it that would cause the pullback so again there are some things where.
Boy if Europe's banking system -- in trouble then I say I can't assess that stay away so I don't necessarily go in if it was just.
-- -- -- -- -- -- -- -- -- -- -- And I think -- US economy is on firmer footing then I go back in so it'll come down to what causes the -- -- Alright nick I got to tell you we appreciate those guide Paulson and knowledge there was -- -- sergeant of -- Washington investment advisors thanks a.
