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Vining Sparks chief economic strategist Craig Dismuke on Facebook's impact on investors.
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-- great that they.
Staying with -- -- had this disaster epic of an IPO rattle investors confidence.
To the point to drive them even farther away from the stock market let's as Craig does -- Senior vice president and chief economic strategist.
It binding sparks Craig -- need of being here because there was so much at least hope.
That if IPO went off well and not just the price appreciation on the first today and ensuing days of trading.
But this was such a colossal flop in terms of how was handled -- open.
Now we're finding out that analysts were reducing their expectations for the company and not telling everybody about it do you think it'd -- -- By individual investors to the point that they believe the stock market for good.
Well good morning day in absolutely I think this -- investor confidence and especially the retail level this was as you mentioned is is a huge deal it was in the middle of -- related economic doldrums everybody was watching it hoping to get some reason to be optimistic.
And what's important is really the younger generation this was the the first company that they had thought maybe they had ownership -- that they really cared about.
And -- that they she said was a colossal disaster it sounds like business priced orders were getting placed there was a delay only open.
NASDAQ which is supposed to be -- technology exchange had major technology problems.
And you sound like there was some research that was coming out to some of institutional investors say maybe for via 38.
And so now now got lawsuits.
And Morgan Stanley saying they're gonna they're gonna.
-- some investors back so actually this -- confidence and in the fairness of the markets.
Do you think -- a look at the look -- look at that's mutual fund flows every week in yet again.
You had billions of dollars flooding out of stock -- three and a half billion dollars roughly out of US stock funds.
And then six billion dollars just in a week.
Into taxable bond funds and that's what you've seen week after week after week we really year after year.
It will any thing.
Change that and I worry about the risks that investors are taking buying and owning so much fixed income at this point.
Sure -- -- mean you have you.
Something we'll change it eventually when you when you start to see.
The economy.
Expand on its own accord.
When you start to see a sustainable rally and an equities when you see Greece and Europe off the table.
But there -- a lot of things that -- happen before that cars and so if you're actually right there's a lot of demand for bonds we see it here.
-- -- -- You know and in new economy is growing at 2%.
Three or 4% yield is it is it necessarily something out to sneeze -- so.
So I think they'll continue to be continue to be demand for bonds so long as we're in this type of economy which I would say -- -- before.
A good time to come.
What would -- if you're -- new money to something what is it.
Give me an idea.
Well certainly we like bonds.
And if you if you look across the the spectrum a fixed income.
I would say.
Municipal bonds is where we can see what we see some yield.
And so we're recommending that investors use municipal bonds for their.
For the portion of their portfolio that they want to pick up income.
And then on the you converse to that we recommend short.
Cash flowing bonds things like mortgage backed securities.
Something that'll give you short cash flows.
Limit your.
-- -- -- price volatility.
Limit your exposure to long term interest rates and so make -- those -- is really a Barbell strategy as we call it.
Craig thanks for -- -- great -- -- Craig Disney is always nice to hear a similar accent sort of but -- happen banks that in bank gave.
