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Is the Market Correctly Priced?

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  • Description

    Planned Financial Services CEO Frank Fantozzi gives his outlook for the markets.

  • Duration 3:24
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Are flat just starting -- with -- out of a bad and yes and he's kind of backpedaling for a second day in a -- -- our next guest is bracing for a pullback.

Joining us now frank fans happy CEO planned financial services frank Avila that's -- -- thing is felt the wave of markets have been acting.

It's a really hard for people to step out of it right now.

I definitely agree the market's been sending very mixed signals and if -- a little bit of repeating itself 2010 and 2011 we had to pull back.

So the indication is were lining up for something similar this summer.

So frank -- allocating your investments right now what direction -- -- heading.

-- what we're definitely bullish on the S&P the market overall has met its -- -- at least in our estimation the nine to 12% gain already.

But we do it definitely feel -- are a bias towards large cap domestic growth.

How we feel that that's gonna continue do well for us we're definitely be emphasizing.

Europe -- sliding into recession and we feel that there's not a lot of value there.

And we also are still strong from an equity standpoint.

With the emerging markets.

Well what worries you most about the what what's the way this market is reacting these days -- this these big growth companies what we're not seeing any -- you know new high flyers come up.

-- -- -- Well word.

We we've been talking to our clients and and and analysts and really in a slow growth mode and unfortunately that's not the kind of news.

Everyone's very receptive they want -- higher growth rate.

You know they look at the G GDP -- they want that to be closer to point 75 -- three.

And right now we're approaching you know to a two and a quarter which is not really satisfying.

The masses.

Frank do you think the valuations of the equities right now are really reflecting what the economy is telling us and all the data that's coming out which seems to be -- offering a best sputtering along I guess -- what I'm gonna say.

Yeah that's a good assessment.

-- valuation if you.

-- the -- -- price ratio for the market overall it's at thirteen so from a valuation standpoint.

I think the market is is this correctly priced in unfortunately there's a lot of things wavering in the marketplace.

Which is pretty some uncertainty.

So certain sectors of the market -- are looking a little more favorable.

Like industrials and technology.

Were in other concerns like interest sensitive.

In the notes like treasuries.

Are something that our our we're trying to.

You know I know your former -- Arthur Anderson guy I was at Ernst and young's I gotta ask you about taxes.

Income tax free state and local bonds President Obama -- -- -- you know getting rid of that.

What isn't due to the it and that little market.

-- -- -- it's gonna change the flow of funds from a valuation standpoint.

His from a historical standpoint the market prices and income taxes and it really doesn't change the overall valuation.

However investor behavior I think will become a concern.

Only in that for example with I mean Muni bonds if they take that off the table I.

-- does the money come from to fund that -- that's a big source of revenue when you look at your state and local governments so.

Clearly the flow of investment dollars in 2013.

Could be impacted if President Obama gets reelected and his tax policy changes come come true.

Yes you know had a hard time getting people to invest in this market -- you know they're tax incentives -- -- frank front I think thank you so much to be on us.

Thank you Tracy thank you actually for him.

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