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To Stock Pick Or Not?

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  • Description

    Mark Matson, CEO of Matson Money, on market return, investing and buying short term incomes.

  • Duration 3:19
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Well our next guest says forget the Dow forget -- S&P and back forget individual stock picking altogether.

Yeah it 45 countries and 121000 sonics' Smart -- CEO.

-- -- money and has been out -- you say not yet.

To stock pick a lot of analysts -- bucks is is -- we have to stop it why legal and otherwise.

Well that one -- -- and main street investors to remember is that the returns come from the market.

Not the manager in fact over any significant period of time with say ten years 70% of all the act.

Active managers underperform the market.

Only 30% win.

But you don't get to know that 30% is in advance so every investor is entitled to a market rate of return if they're Smart enough to allocate their their portfolio into capturing those dimensions.

They're job is not -- out doing stock picking market timing.

Or track record investing.

All right but you know -- -- like you're you're not -- 45 different countries fall thousands stocks -- to truly be.

Diversified.

Most of our viewers are gonna have to do percentages what opportunities do you recommend is -- point person -- national.

What small cap was large -- tell me.

That's a great that's a great question in most investors need to start with the first single more important question what percentage equities.

And -- -- fixed income in the reality is -- today most investors have panicked when the market went down the average investor lost 33% of all our money when the market crashed.

They're still sitting on the sidelines but the S&P it's up 80% since the crash so -- out not.

90% that was the -- -- yeah percentage but ma.

For most investors.

-- 5050 mix of equities vs short term fixed income does really really well and and they have to rebalance.

On the ups and downs and that's the hardest thing you forced yourself to buy more equities.

While their wobbled and then you have to be more active but I mean how many times -- -- to rebalance once a year twice a year and what do you tell people.

I think in -- good investors should be looking at at a quarterly.

But when they -- balance the crucial thing is not -- Reset the targets you know facing all of Europe's doing bad I'm gonna get all out of Europe and change my target that's market timing that's disaster OK -- there's -- And thing that we if we work a little more specific group led MS and I know that you like the financial sector if you look at financials European the first was down about 1%.

The wild swings unfortunately for that sector but if I was completely did -- diversified in the market elegant missed that one nice pop and it got in the financial sector -- and that.

Well they've financials are really important -- investor to increase returns their portfolio two things micro cap stocks.

And -- book to market value stocks in the average financial company right now had the book to market value of one point.

Nine to one that means they have twice as many assets as their market price that means the long term -- -- expect to return for that segment of the market.

I even though there's a lot of things going on right now with a lot worse Dan and the also -- JPMorgan.

Disaster with the trade -- cost and five point eight billion dollars.

Don't throw out the baby with the bath water feet long term -- financial.

About him and that's the point -- TV's massive headlines a -- you know you think basically that these CEOs are stealing from you.

US consumer discretionary deal like industrials a wanna throw that out earlier before -- mark Mattson -- line mark thank you have.

My pleasure.

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