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So a lot of you have gone into treasuries over the past two years very worried and thinking that will make my portfolio safe.
You need to think again according to Joseph -- of United Capital -- -- just a small.
Tightening in rates.
Could make even the most conservative portfolios hurt the worst Joseph -- the CEO the United Capital in a Fox Business exclusive with his latest report.
And I want to hold this up the title is bonds is this over inflated life preserve.
Ready to pop that's a dramatic statement hasn't this treasury.
Situation always been the safest thing going.
It is people -- bonds for two reasons for safety and for yield and for the -- videos we've had the most unprecedented.
Move and bonds that we've ever experienced in in America.
So we will become incredibly conditioned and spoiled by the drop in interest rates which has given us not just high yields -- so appreciation of the underlying assets.
We able for the last -- for the last fifteen years if he had more in bonds you actually out performs under that more and stocks.
Well the last two years so the yields especially in the last twenty minutes -- -- have been pretty pathetic cat yeah not so.
You're saying that if there is even the most my new tightening first -- that how much a quarter of -- -- A 1% increase in the ten year bond affinity of bond remember -- pop historical averages -- simply just up from two to 3%.
On the ten you know from three to 4% and just think a year and a half ago we were at significantly high level.
So that's small increase.
Could lead -- to a 20% decline in affinity a bond OK you would wipe out a lot of whatever gains you had folks five steps again.
Give us five steps on how to avoid.
That kind of issue with your portal so the first thing -- don't reach for yield.
It's very important that you stay safe and -- stay with shorter maturity fixed income that's the first step if you're going fixed income fixed income.
The second is to remember to invest in areas.
Where there is it safe field that.
Companies haven't been particular sectors like utilities very safe -- so -- risk is much much less and I are talking dividends dividend aspect.
Think about the possibility that if you're investing in fixed income that you must be careful about the vehicle you invest and dawn on.
Long dated ETS dawned on.
I'm flexible mutual funds because they will on those bonds regardless of what happens.
And they re price in recent we'll -- -- massive rescue also say don't under estimate cash yes.
The power of cash our cash and the reality is you're not giving it any real extra yield to have a five year treasuries on the cash because the reality is it's not gonna go anyway.
Let's throw up two ideas here that you like Canada ET -- MS Morgan Stanley global franchise and you also like the iShares global consumers you know -- Two reasons that my shields and most importantly they take advantage of the growth in emerging markets which is fantastic.
The only place you can find growth today that's.
Really interesting and investments good year to date picture here Joseph Doran United Capital CEO by the way his report is available for free -- on united CP dot com.
Check it out interest in perspective thank you so much.
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