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Gradient Investments Senior Portfolio Manager Michael Binger and Portfolio LLC CIO Lee Munson on the outlook for the markets.
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So much let's bring in our market panel right now we have -- months and he's the founder chief investment officer portfolio LLC.
And Michael -- is a senior portfolio manager with the gradient investments gentlemen good to see -- -- first EU.
A lot of folks out there waiting for a big pull back -- today we had almost triple digit down I think the Dow ended down about 99 points but we haven't seen it.
Any sort of big pullback you say don't wait for the big pull back.
It might not be coming wide.
Well let's talk about what the big pull back his first day because there's a difference between selling on the news on the fiscal -- deal.
Vs the Armageddon if we go over the fiscal cliff I think it right now if you -- cash because you've got bamboozled.
By politicians thinking that we're gonna go off the edge of the market's gonna go down 50% I think you've got.
You know you got bamboozled I think you have to start putting money back -- Now I think if you're more tactical you -- -- see when we get this fiscal Clinton done.
I think that they'll be some selling of the news and I think that that's going to be in no other way that you can get an.
But I'm certainly not thinking that we're gonna get a 203040%.
Correction.
Like some of seeing plus 2013 is going to be great and I'm not sure about double digit earnings growth which I'd love to see by the way.
But we've got you know credit easing in Europe and UK -- a miracle in Japan I mean it's incredible earnings are starting to rebound because nominal GDP is increasing.
And then the other thing about volatility volatility is going lower and that makes what could happen.
More tight and so there's less variability going to next year all those three things I think we have a great year -- -- price performance is concerned.
Michael you're optimistic as well but we we know this and -- -- show BS and pay for the year.
Up about 16% year over year the NASDAQ up 17%.
These are beautiful performances can't -- continue 12013.
Well I guess that's a question a lot when I say -- when people say all the markets are up they're expensive that's not necessarily so you need to examine.
Why the markets are up and the markets are up because the consumers' confidence spending.
And earnings are great and the stock market is made up of individual stocks -- represent corporate earnings.
So as I looked out and -- quite thirteen I see a bunch of tail winds.
I called the energy sector the housing sector's getting a lot better I do agree that capital equipment.
Capital spending and manufacturing is making a Renaissance in the US again -- and I believe that -- -- tail winds combined with the chief market make for good earnings which will make for good stock market next year.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 2013.
Might be the year that they begin to spend that money on their capital investments if that happens -- that not create.
At boom at least in the sector of of capital equipment.
I I believe -- slowly -- I think corporate America has very high margins right now.
But those margins have come because of cost cutting and I think that cost cutting its profit trend is kinda run -- right now.
To grow in the future I think they're gonna have to in best and I think they're gonna have to invest in people so I see employment getting gradually better.
I think they're gonna have to invest in technology capital goods and I think that creates a boom in the US economy along with the energy along with housing.
That's where I see things going at thirteen -- We make some money here what are you investing in bed with the perspective you've just articulated.
Well first thought I wanna say that you know I agree with lot of what Michael -- but -- taking a little bit different approach.
The market is churning right now -- that's going from sector to sector and I find it very hard with the growing monetary base in all the things Michael's talk -- I agree with.
That there's going to be particular standout sectors that we can invest in now.
And -- we're gonna profit from 612 months from now I would much rather see people they wanna you know they wanna be -- business of this market to make some cash.
-- small cap and a broad based index.
Don't worry about valued to worry about growth.
Story about housing I think it's going to be great -- -- -- capital equipment still think it's going to be great but just get the whole index against the rise of that market in the highest beta sector I think if you wanna go outside the United States for those emerging markets you don't have to go necessarily in Europe right now but -- take keep broad.
Because if not you may end up getting not one sector that just didn't really bring home the bacon.
So keep a -- keep it cheap I think you'll make money no matter what.
Well Michael if you do like the technology sector you -- broad way of approaching that with the ETF.
XLK.
That's that's one -- put your money betting on an entire sector rather than just one stop.
Yes I would agree I think the XOK is a great way to play technology investing that's going to take place in corporate America.
And frankly around the world especially in emerging markets.
The XLK is a broad base of US based technology stocks which I think -- cheap right now.
It's dominated the biggest holding in that -- TF is apple.
I think Apple's pull back I think the EE TF it's at an optimal point to buy right now I think that he -- make -- money and twice their ten.
Michael -- and -- months and always a pleasure to see you guys thanks very much for coming -- appreciate it.
Thank you.
