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Penn Financial CEO Matt McCall on the recent economic and market uncertainties and their impact on investors.
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In focus tonight the market stocks down at one point triple digits today on newly released minutes from the Fed's June meeting.
Federal Reserve officials expressing concern are struggling economy could in fact get worse.
If congress failed to prevent tax hikes and spending cuts by the end of the year so -- -- this take on investor confidence Matt McCall.
Is the CEO of financial group so here's what the Fed said.
We're having more modest pace of economic expansion.
Yeah I mean I read -- thing it's like there's nothing good nothing good and what's more we're not prepared do much no way I think investors -- It's amazing I some of the quotes having had this -- -- -- and the first of all we it's everything that we already know.
We know the economy slowing down they they let us know that the unemployment rate has been elevated get the heck out of my and it's really not that good.
They also said no the only way that they're gonna do something.
Is if things get worse so it's also in a bad news comes out we see the market actually do the better candidate -- people are realizing well the worst things get.
In the Fed's gonna be that a back stop us again and lower interest rates and into the can't really do what buy bonds inquirer can't -- can I just tell you that.
That Wall Street is -- the worst at looking for a free ride.
You know that's stock selloff because we're not getting QE3 if explained I mean these people who want free markets but at the same time they wanna have their cake it needed tail.
They -- free markets and long term I want free markets to -- from my investors that are in the market mean myself being in a market if we get QE3 -- another round of quantitative easing we know darn well it puts the stock market higher the last two times that happened market rally that's 125%.
And six months.
So again you're gonna assume that if that happens the stocks take off rally into an election rally into the end of the year so the market.
As investors who want that the -- -- talking to get us out of her mouth and -- -- stay away don't have -- I.
I agree I don't know what what what I -- today -- you're pro.
QE3 you'd like to see that looks a little bit about investor confidence -- at the markets would go up on the basis of that but we've got things coming this fall Obama care I mean every part of that is coming into view.
And Virginia we're gonna have a lot of these taxes really starting in on.
Investor earnings it's really gonna hurt investors.
Don't you think that that has been up override any -- QE3 that ultimately people will look at the change tax climate in say.
Come on.
I think a lot of -- -- you're assuming that it's gonna pull and push from the -- something we'll be figured -- Washington.
You know that may be you know they extend the tax cuts and and -- won't raise dividend a tax on dividends obamacare -- -- -- as much they thought.
So I think people are are optimistic as far as that's concerned and it they're close their eyes and just -- QE3 and that happens at the ended year like you just mentioned.
The market gets crushed I mean you wouldn't win -- -- at all.
Right but it's Matt half glass full McCall -- -- -- -- -- -- -- let's have a good thanks so how about dividends as stock's -- mutual funds a lot of people like to recommend them.
You say don't buy -- stock just because of its dividend.
No you don't buy stock based on a high dividend because a lot of times their reason has a high dividend yield to the stock price -- so much there's real pain -- think dividend but the prices stock is going the wrong directions going down.
When you look at return on the stock can look at that how much you meet on Stockwell capital appreciation of price of that stock -- higher than that in the dividend that your total return.
Right now -- of the ten year yield at one point 5%.
In the United States treasury bond.
Which I don't would never alone among US government money -- all personally.
And then you -- their lives coming in between 35% for a lot of strong stocks out there I think you better off going -- stocks are paying dividends if you want income -- place to find that's really Smart now what you -- could you actually analyst forestry we bought -- for our clients to -- last week -- -- action ETF and exchange traded funds what -- up as a basket of stocks yes much cheaper and mutual funds.
It's a basket of mortgage reits so PC what they do they buy up all these markets really want that -- sound extreme song chart looks.
-- -- -- angry hello fifth it's yielding thirteen and a half percent.
I hope so you get even if it goes flat -- you make thirteen and a half percent in Moscow and an irate over you don't wanna pay taxes on those that aren't coming in public there's a lot of amazing adaptive and -- -- -- -- -- putting -- you know money weren't -- marry her mouth that I have respect that very much okay.
Hello my fingers across as and -- Map thanks for coming on tonight always good to talk to you.
