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Nuveen Asset Management Chief Equity Strategist Bob Doll on the impact on the markets and investors’ strategies by the uncertainties in the fiscal c...
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The deadline to reach a deal on a fiscal crisis is fast approaching.
And it is causing some investors to play it safe but we have a legendary money -- -- says it's time.
To take risks and the gridlock in DC is not stopping him from putting his money to work.
Joining us now is Bob -- on Libyan assets this -- -- is act equity strategist and senior portfolio manager Bob thanks so much for joining us.
I'm what is obviously -- really important day as we approach the end of the year.
Let's take at the at the end of the day we saw the market sell off there's so much and certainly people are still putting their money and the sidelines.
-- what did you as we approached all this uncertainty at the end of the year what do you make of it will we get.
A decision from both parties -- by the end of the year.
Look the uncertainty is certainly driving volatility in both directions that as you know watching the last -- -- days.
And I think that continues.
-- we don't know when we're going to get a deal.
Here's my view.
Call me to cock eyed optimist.
In my view this -- this fiscal cliff is so big they almost have to do something they do not want -- preside.
Over a major recession the probability of recession goals up a lot if we do nothing so I can tell you who -- -- It's gonna be a matter of may -- we get something done by -- December 20/20 one.
May -- we go off the cliff the beginning of the year for a bit we make some things retroactive but I don't think they're gonna -- their thumbs.
From now until.
We have recession.
Now Bob you know some people say tag -- taxes companies don't make decisions based on -- -- yes they do when they are right now with regard to dividend we see them.
Pushing their dividend payments out in this year because they -- taxes are gonna go up and -- -- next year so people do change their behavior in business.
And some of the sense and nonsense we've been hearing about tax policy sort of adds up and and the folks out -- don't know what to make -- let me just read some sensible stuff to you about tax policy.
And ask you to guests who set of principles for tax reform it's very short.
Lower tax rates the tax system should be simplified and work for all Americans would lower individual.
And corporate tax rates and -- work brackets.
In our viewers can see who said this but would you be surprised to hear that was Barack Obama speaking back in 2011.
Now let's replay that tape I'd like to hear that again nice talking some sense.
That's all we -- have a -- -- that it's -- exactly the opposite today saying that we need -- higher -- -- what happened -- -- -- severe.
Since then so what -- what -- pointing out his uncertainty I think people and businesses.
Can deal with tax rates differ from what they are where they can't deal is what we have no clue.
Uncertainty is that is one of the worst things for markets and that's why as -- reporter few minutes ago.
Companies are sitting on this massive amount of cash they just don't know what to do we need that given the rules.
So about it and it it if we can all agree that taxes in some form are going to go up in the new year.
What do you do with your money are we all the sudden see a re allocation of funds are people -- -- avoid the stock market and look elsewhere.
What -- that environment look like.
Yeah I don't think that's what happens when we're not talking about taking tax rates from -- A 35 to fifty or sixty we're talking and a few percentage points so it's the uncertainty around well to like get my deductions -- I pay a higher rate.
What is the Nixon until them sit on my hands -- -- bring it up again the uncertainty factor I think we'll get to a point where we get some sort of compromise around these things in we'll get back to a muddle through economy not a great one but a good enough one.
-- the president's comments.
Of last year notwithstanding where he was for lower rates the rates apparently are gonna be going up in one way shape or form.
Is it conceivable that rather than spending money in the stock market where people gonna get taxed more.
-- say they think of more direct investment that is actually getting into more vehicles.
That -- avoid the stock market entirely -- get the cash directly to the company's.
But that could happen and frankly that would be good for the economy which in a perverse way would be good for the stock market as well you see my logic.
I think it's getting to -- people to move off the dime.
Not to say I don't need this court of cash that's frankly earning almost nothing I need to put it to work someway somehow give me a reason to do that.
And the rule book is often a good reason people -- -- now I can figure out how to get the job done.
Bob doll this is -- working out for if we were so -- valley -- Bob doll for what sort of OK you.
Good stuff Bob thanking her remarks thank you very much for coming in Bob -- -- investments.
