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Glenmede Director of Investment Strategy Jason Pride on manufacturing in the U.S. and its impact on investors.
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I'd be itching to see that they have to say well the -- certainly posting a second they've big gains still a 114 as -- earnings season gets -- -- way my next guest says.
Investors should look to the US manufacturing and an emerging market consumer growth the long term investment ideas.
Joining me now Jason pride director of investment strategy -- -- which manages by the way over twenty billion dollars.
Our Jason thanks for joining us out I guess my thanks -- -- like I didn't realize there was any manufacturing going on in the US.
We know the US manufacturing Renaissance as we've been hearing quite for quite some time now is it's a very gradual improvement what's happened is.
The US is held its labor costs fairly low relative to majority of the idea international markets.
Everybody in Europe rather than Germany -- seen a fairly dramatic rise in the past decade or so in their labor costs we see we're seeing some of their -- so that now.
And we know that -- that costs have been increasing or at least wages have been increasing tension.
But ten to 15% in emerging markets and that means two things.
As those wages go up US wages become more competitive bright light by comparison when something else is rising 1015% the other side.
It's ten to 15% cheaper -- more cost effective.
We see evidence that would companies actually bringing manufacturing capabilities into the US incremental plans by decision.
-- manufacturing capacity additions.
Are actually being made in the US by.
US companies by European companies and even by some Asian companies.
Let me Jason this -- take a macro view of the markets that we -- -- I think with FedEx turned a few challenges to some key support levels suddenly on the -- David so far.
The bulls this met that challenge pretty well have you see the rest of the year playing out.
While -- we continue to think.
This as a very slow and sloppy recovery.
Right but it's a recovery nevertheless nobody ever said the deleveraging is going to be easy and that's exactly -- if you were to deleveraging this entire recovery.
That means growth is slower and means are closer -- zero which mean which also means there -- more risk of disruptions just the slightest blip.
-- -- into a tailspin so risk is high.
Nevertheless we think it's a continual recovery it's something they'll gradually work its way -- -- and its way out.
Over the course of the next couple years not just the next year it'll take quite some time.
And it will be slow and sloppy through that period meaning we will see the ups and downs.
As we continue on an upward grinding -- Well you know you like manufacturing and emerging markets what else do you like in this in this market right now investors should perhaps look look.
Perhaps investors -- ignoring that they really should take a second look at.
Sure if you if you really do -- into this concept of this being slow and -- told recovery.
Well let tell you two things -- -- tell you that equities are probably not gonna deliver upon their historical rate of return the -- short of that and -- still.
-- the same level volatility -- that might it not be the best opportunity out there.
Assimilate cash in fixed income is basically priced to underperform inflation for the next ten years.
So you think of those two as the extremes we've been recommending investors -- focus on anything in the middle anything you can find it delivers.
A reasonable protection against disruptions but also delivers a good return and that includes.
High yield bonds.
High quality stocks not regular equities things are more protected within the the equity space taking some credit risk with high yield bonds and global bonds particularly sovereigns in the emerging markets.
And then even using some alternative or more esoteric strategies such as covered calls where you're selling some -- -- upside and -- portfolio.
Against that portfolio in capturing that as a bit of a cash flow and even -- -- enhancement through the period also.
Acts is a way to stabilize the portfolio.
A wealth of information no doubt take some -- thank you so much for joining us appreciate it.
