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Are Markets Prepared for Global Tragedies?

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    Matson Money CEO Mark Matson on how the markets absorb tragedies.

  • Duration 3:04
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Well markets have their eye on several things today as they intend to the Middle East you got Germany's High Court ruling affirming the 600 billion dollar -- on bail out and push the Fed meeting which gets underway today -- Manson -- some money -- resilience.

Now mark you say that markets are at this point in time more prepared for global tragedies like the -- we had overnight.

Yeah out now what happened last night was absolutely tragic -- as a nation it's time to mourn.

But as an investor it's never time to panic.

You -- have to have to understand over the last ten years.

The market has seen a lot of tragedy in a lot of chaos in not in the mideast -- but at the same time US small cap value stocks.

Are up over a 10880%.

Since -- Crescent real estate crash.

And small stocks -- up a 170%.

During the same time period and so markets have a way of absorbing this -- chaos.

Today's a good example.

-- up 1% today even with the news Europe is up and of course America is up so.

You know don't panic keep your eye out twenty years from now you know more in this and we pray that our government responds appropriately don't panic.

It certainly okay Edison to -- peg I think though from an investment perspective here last time -- on the show you says something that surprised me I've known you for years so that you would -- your.

Allocation to emerging markets by 30% and I about fell off the chair -- when you told me that you were going -- heavily into emerging markets.

But wouldn't have news events like this does -- kind of give you pause to think.

May -- allocation is a little too aggressive at this point.

Yeah well we've actually had that outpatient for the last fifteen years.

But that the key point to make is this is that.

Owning international equities do not increase risk I know that's that common perception from that Wall Street wants investors to believe.

But the cause they have dissimilar price movement it actually reduces risk.

And then when markets Ukraine has been you have to rebalance if international underperform over five month period six month -- -- -- to sell US and buy more apart for investors view.

What about the Fed because they're gonna be doing something tomorrow we don't know what how are you feeling about the Fed decision -- we're gonna get tomorrow do you have any kind of -- -- leisure reading right now mark.

If he's definitely yeah I tell you what sure I am fed up with the Fed bottom line they're gonna suggest.

Yeah they're gonna try to increase the monetary base.

But it's not increasing M one which -- true money supply in the reason is because nobody wants to borrow.

Companies are sitting over two trillion dollars of cash individuals are sending -- seven trillion dollars to cast.

Nobody in their right mind with the fiscal policy that's in place.

Once that go out in leverage -- by build a million dollar.

Factory in the res output new month new money and research because there's too much risk so we can't keep running four trillion dollar deficits per year and expect.

That monetary policy is going to do anything.

Mark -- thank you very much a market that's -- who's got out of the my pleasure.

Oh my god one.

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