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Jay Pestrichelli of ZEGA Financial discusses how the expiration of the Bush tax cuts would impact the market.
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Oh how is president Obama's campaign for higher taxes affecting this market.
Joining us now straight Petrocelli from the Zynga financial.
Is that a financial -- You know big big conversation has been mostly about small businesses but.
How houses higher tax policy.
Affecting the overall economy the overall stock market.
Well Charles outside -- I think.
As an investor right outside -- I think it's good and impact the stock market and the answer is it's gonna change behavior.
You know investors and traders are incentive by the tax -- right that's what the tax code does -- -- short term or long term gains.
It's gonna change the way that they act in the market right it may move.
Some of those you know higher tax rate -- higher tax -- frequency strategies over to say tax deferred accounts.
You know I think there's a lot of speculation that this will you know drive.
Down market girl pull out a lot of profits from the market and you know quite frankly investors are pretty savvy they make adjustments and -- changed with the tax couldn't since -- to do so.
You know one of the things that we do our permit and you know the -- -- we we hedge and so it creates a lot of taxable events whether positive or negative and.
You know one of the things that we do with that information as we make sure allocating those appropriately in -- Smart investors.
Have to figure out the right way to adjust to the tax -- I think it'll change behavior.
-- not necessarily.
Sure that it's actually gonna drives down.
The market -- not sure it's gonna put a lot of -- what Iran could return and someone argued that it's already driving down the market that you know a lot of people are are very has the tenth.
To do to make any big moves particularly from an economic point of view you're not seeing large -- moral companies.
Make that type of investments that really propel an economy Ford and on the other hand the things like a lot of investors are just saying you know what.
I'd rather hold these treasuries that data wanted to -- percent yield and wait for this whole thing -- -- dark cloud of bug gigantic taxes the -- But I think you're I think from an accounting perspective there's going to be a lot of changes in this certainly going to be some pressure on those you know those that whatever was -- two or 3% of the companies that are gonna have the that the proposed changes affect them as for investing you know -- I think investors and traders are gonna be driven to go -- -- where the money is right and it one of the things that we look at all the time is what is the most effective use of your cash what is the most effective way to invest -- and I agree that the vehicles that people are going to invest in -- definitely changed.
Hey you may even see people moving out of this the the spiders the -- Weyrich S&P 500 dividend paying Narnia.
And move into you know futures that that have you know positive.
Are beneficial tax treatment of you know 60% more long term verse 48 and 40% short term cat country and I -- it's one of those things you'll see people adjust in the market Charles.
It's one of the things that we do based on you know the way that the tax code treats us and and I think investors are gonna -- -- can tell you one thing today if big tax dividends over 40% yet -- absolutely right.
People it's all about maybe trying to make principal go up and that's gonna destroy so many people particularly those.
On fixed incomes state that's -- -- appreciate your expertise this morning.
