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Tonight the crisis of confidence on Wall Street will not on Wall Street among small investors.
A slew of negative headlines converging on us so what does it mean for you and your money here with me now Hilary Kramer she's the editor gain changer stocks -- the author of he probably seen at the little book the big profits from small stocks why you'll never buy a stock over ten bucks and -- Welcome back to the show Hillary it's great to see you as always.
I want first to get you to respond to something Bill Gross that which was kinda I could clear what was going on here here's this comment.
The cult of equity is dying he says the long term history of inflation adjusted returns from -- -- a persistent.
But recently fading six point 6% real return since 1912 so.
Basically I wonder is the man talking his book is he's a big bond holder or -- -- really believe the stock markets blown out.
Terry what a good point that you -- here Bill Gross although I have great respect for him I.
Absolutely differ with his opinion first of all Bill Gross just recently said that bondholders should expect -- there might be some kind of -- coming for them.
But in terms of the equity market and that comment we've gone through a -- period of time this is exactly when an investor.
Really be investing in everything from the small caps mid caps in the large cap stocks I in particular at the other at least -- -- -- -- I wanna pursue this because I don't think a lot of individual investors -- there are really apps that.
And are upset about always embarrassments in trading what's gone on just this week.
-- with with that and trading on Wall Street a lot of people.
You know -- the insider trading cases going nine.
It seems like every day there's a new embarrassment with somebody -- Wall Street and you look at this and you stand back and you say there's not an even trip playing field when it comes to stocks.
What do you say.
It is more of an even playing field for investors individual investors than ever before.
Because the Internet has created so much transparency.
In the availability of information.
Now in terms of what happened lets you -- FaceBook in which case you don't know what you're getting I mean -- individual investors got slammed and that.
And we need competitive knowledge at least that.
Small investors are feeling a little under the gun here.
Well absolutely but it's usually exactly this time -- -- That the market will turn and turn into a bull market we have gone through twelve horrible year -- -- stock market and that is your point -- And to think that Bill Gross now is saying oh no you don't wanna be -- equities when where we or in this incredible bond bubble.
And there's all of these companies out there that half.
Cash on their balance sheets there when they're ready to grow there's innovation.
And where so much more -- appearing here in terms of in many ways our workforce.
And some of the are indeed -- and it's in this country.
Vs our attrition year we have had a huge rally so for anybody out there is saying you know is that this stock at cult of -- equity is over.
Luck the S&P is up ten point 8% this year the Dow up seven point three but the Russell.
Only up seven point 2% you love small stocks so tell me.
Not keeping up with the rest of the world so why should I buy these small cap stocks now.
Because as the stock market turns and we go in to a more protracted rally.
And yes -- up ten for more than 10% on the S&P 500 is wonderful for investors.
These small cap stocks are going to start to did to gains -- meant -- -- called on the street catching a bid.
So Jerry you're going to see many of these smaller companies that it just not had enough coverage on Wall Street -- -- for grown our remembered the F -- -- Standard and Poor's.
When it when our credit rating of the US government was downgraded.
This the Russell 2000 lost 17%.
Peak to trough.
In comparison to much that smaller losses on the other exit gotten further to run in your area that they we call -- beta which means volatility when -- market's down they're down.
Hilary thanks for coming -- you have to come back so we talk about your stock picks next time but thank you so much for helping us that's and I really appreciate up.