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Morgan Stanley Chief Investment Strategist David Darst on the six factors investors should consider when planning investment strategy.
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Have you -- -- what you don't listen to this next segment because precisely what we've been talking about worrying about these things guess what our next guest has six.
Could you call warning flags he's calling them the six piece -- in the letter.
-- the -- stays Morgan Stanley Smith Barney's chief investment strategist one point seven trillion in assets under management.
You have been bullish and made big wins on that lately you've got a little bearish and of course the news about Spain today.
My question to becomes this six -- we'll get to into him in the moment but.
Does it matter if we don't hit the thirteen 1212.
Number on the data dating what.
Some degree -- it's a great point you're bringing up it's a psychological point.
It's been a rare thing for the market to be the -- to be up seven months in a row which you just pointed out.
If it does that the last I think in the last time that happened was five years ago pre crisis.
So it's a -- benefit that's what's another evidence of a slight recovery of resuscitation of a rejuvenation of Iran assaults and I quote you on that resuscitation rejuvenation Renaissance.
Liz.
You wanna watch you -- to watch this -- situation that you've been accurately pointing out.
Spain's banks I'd need a huge capital injection if I -- They head of the European Central Bank I would put some I would that why wait for the crisis to erupt okay.
Now Morgan Stanley's folks in Europe think the house prices as plainly as are gonna drop another 25%.
Over the next couple of years.
And that well because of the wealth effect would hurt their economy by 2% each year more than it's supposed to be going down.
Supposed to be in negative territory already that was the the number we heard this morning.
So you wanna look at the -- wanna look at the banks there you wanna look at the property prices there.
The an unemployment rate is 24%.
It's the largest of any developed country any rich country of the world and they are the fourth largest -- got.
Germany France Italy Spain.
And netherlands' number five and they too have had some problem credits but commander -- you -- you wanna look at the banks 31 a look at the property there and that do watch list you wanna basically just take you wanna take.
Risk risk.
Protecting measures you've got this tape you've got two different -- being told right now you talk about the treasury.
Is trading at 193.
Which says there's going to be more problems had and the stock market and the stock market is it up eleven point 9% which says things are -- -- -- this -- -- being totally honest so Portugal profits now let's get to petroleum already talked about property and holes up investment the investor sentiment PO -- Holes -- investments investor sentiment right now you've got much more bearish fought so your long term average of the American Association of Individual Investors is 39% bulls 30% Bayer's.
Right now it's roughly -- the reverse of that.
It's 30% -- 39% -- are yields are now -- we just call we are cautious but -- -- a little bit of -- -- -- we have big.
Overweights in US large cap growth stocks which -- these global -- we've talked about with you on the show.
And also in emerging markets but we remain skeptical cautious defensive bearish on Europe and -- politics last.
Politics is this fiscal fiscal cliff we're all talking about you've talked about it here on Fox Business been one of the leaders in talking about this.
525.
Billion dollars of tax cuts.
Which could crimp the more the economy by anywhere from one and a half to three and a half percent.
Unless congress does something about it before he had and the dividends taxes balls to go from 15% to 43%.
List which.
Is up perfect -- which your next segment which won't get to -- a minute he's going to name thirteen.
Dividend paying stocks in a -- there -- a whole bunch of about their but thirteen David durst has.
That he says if you invest -- them and they're paying decent dividends you won't get bitten so badly by any tax changes David coming up in just.
