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Hammers: Treasurys a Safe Bet

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  • Description

    Compass Efficient Model Portfolios CIO Stephen Hammers gives his outlook for the markets.

  • Duration 3:27
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US stocks are up triple digit today but our next guest -- short US equity Stephen hammer chief investment officer and co-founder.

My efficient model portfolio joins us now Stephen why don't you like US stocks especially -- that they're up 120 in the Dow right now.

There's too much risk in the market place it doesn't may not don't like US stocks.

But there's a lot of volatility.

We could expect very sluggish growth in the future.

A lot of that depends on what happened with -- -- But -- -- actually a very slightly net short in terms -- US stock for shareholders and also don't like commodities all that much either to have that right.

That is correct we're actually short seventeen -- twenty most liquid commodities.

Short about net 50% in we've been that way for quite some time which has helped tremendously in the last twelve months is -- the last three months.

Excluding the last few days obviously.

OK so no stocks no commodities so you want -- to lock up my money part ten year at like.

One and a half or 2% in treasuries is that the idea.

Now in our quiet we could expect over the next twelve to 24 months.

Sell a lot of volatility in the stock market we don't expect stocks to really go anywhere in the next twelve months even on to 2013.

But if investors really have a short term view they need to look at some way to hedge stocks whether that's cash whether it's shorting -- looking at alternative funds like ours.

But investors really need to be cautious -- safe haven is obviously the US among global stocks.

But in terms of fixed income the US treasury is definitely a great place to be.

If you want to sit on the sidelines and have a little -- yield this year and next year.

So you think got -- trading and he said treasury funds or something and I get out of my don't hold onto a bond for ten.

Long years at one and a half percent.

Well if you hold on to the tenure treasure -- any bond portfolio.

That has any -- a longer term maturity you could definitely expect in the next few years.

Rates potentially coming up as you go into 2014 and beyond and rates -- for two reasons one the economy improves dramatically which is.

Highly unlikely and to investors around the world see this excessive debt that we have.

As well as in Europe is very high risk which could very well happen.

Now if I'm investing for the really long term though because -- T said that you don't like equities even in the longer term.

I mean in my retirement account I've got another twenty years I should definitely be buying stocks -- show at nine.

We do like equities and a long term there's no question.

And if you -- -- a couple of years we're probably gonna expect a lot of volatility with a fairly flat.

Markets in the US but if you're a long term investor stocks is a great place to be especially emerging market stocks.

They're not involved in all the debt issues.

In economic issues that to develop markets have.

So long term emerging markets are great place to be in if you're looking out five years ten years stocks are a good place to be.

It's just not right now we need to be very very cautious.

With sluggish growth and major major problems in Europe -- really I don't feel that can be resolved.

All right thank you for those comments Stephen hammer we appreciate your being here.

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