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Newoak Capital president James Frischling and Glenmede director of investment strategy Jason Pride discuss the state of the markets.
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Well with congress now on holiday break are the markets too optimistic.
But they're still gonna be a fiscal -- deal before.
That year end deadline they've been -- pretty well distance -- let me direct investment strategy is what does.
Jim personally knew a capital president as with me Jim I'm gonna start with -- Over and over we keep hearing from investment advisors they're gonna get a deal -- gonna get a deal you said that we're gonna get a deal.
What do you say and agent.
Well we we are still calling that although our conference is being tested and speaker Boehner could not even get.
Enough of his own constituents to support his -- plan which.
We did think over the weekend the -- to potentially raise taxes on even though the millionaires was a move in the right direction President Obama the move to 400000.
And we started to see a bid offer spread meeting there was a room for compromise that this kind of the -- -- a little bit.
But we're still convinced that -- rather still a very positive side that a deal will be struck if not by the deadline just.
After -- just after -- -- it's -- it's gotta be next week or no deal.
But again if they fail to do it -- -- it becomes a really risk off scenario.
And I think enough business leaders enough people recognize.
The dramatic effect of a no deal and -- near term deal that we are still confident that the right things get done we've seen this movie before -- said that.
But but it has to be at the last moment because that's how they're gonna draw this out Chester bumping positions are being dug in but our confidence remains that that -- that saner heads will provide.
You know what Jason at the same time knowing what you've heard again is and this is what -- is actually again is we're gonna get -- a deal.
We know what the timing of this could be a disaster for portfolio managers like yourself.
Who got advise your clients what they're moving to be before the end of the year.
And -- your tax planning has been a major issue for many investors.
Look I kind of agree with you but I -- but I don't completely.
-- we look at this this deal we've been saying for quite some time our base case is -- -- there -- be some sort of -- of the situation some -- -- that would come in Poland the eleventh hour.
I just like we've seen before but that there was not an immaterial chance of a slip up here where we didn't have a deal.
So how do you deal with that is an investor you -- -- and the reality of it is it's not quite that black and white.
Investors do not have to decide between just owning stocks on one side or just stunning cash on the other side there are a lot of things out there to buy.
There are bonds you can buy that protect you -- the likelihood of you not.
Getting ridiculous because we -- -- the -- -- -- Over to sudden drop off the cliff let me just an -- to seconds and I'm gonna get to kind of some some ideas of the best ideas for our viewers -- -- -- -- -- from what we -- look at a stock like apple look at the dividend selling moves that we see -- -- stocks like apple look at companies that are coming up in those dividends before the end of the year saying all right.
Here's the caption outlook for the -- here I mean these are real.
Examples of movies being made before the end of the year I mean you you understand that right.
Oh definitely this is this is you know companies being.
Discipline and understanding what's likely gonna do or what the possibilities are things coming -- in the future.
These are moves -- don't necessarily change their prospects are there businesses that they can just by moving things across that January 1 deadline.
They can change the outcome -- the likelihood of outcomes for their shareholders.
-- they're very disciplined and organized moves in my mind.
Okay they are but they're also get those last minute instant wrestling and carries -- a -- clients have come in your office -- and what am I gonna do what do you tell them either sectors that you think.
Could be hurt.
By this fiscal -- fiasco -- sectors that you are advising them to buy intent.
-- that the sector that we're I guess we've we think could be most -- -- impacted directly is house.
And -- on it that way and and and by the way they're even could be a deal done but still -- housing in terms of the of the mortgage -- great reduction of mortgage the debt relief act of 07 things that actually will make it may be less in the idea -- enthusiasm let's say.
For home -- which by the way on a nice uptick housing has been one of the great drivers of this recovery.
And we do think either a weak Deal or No Deal could directly upset that market and and really kind of wipe out some of the gains -- the momentum that.
That's really dancing August housing -- -- negative and Jason I know ahead is that -- you said that there are other positives.
That can come out of as a positive -- they're getting pretty well ahead.
The situation or is one of timeline very similar what we went there with a TARP and fiscal stimulus package -- back in in 09 no wait time -- And this is something of timing they're probably gonna be disruption if we hit the fiscal clip but.
At the same time regulators and later says -- probably end up being -- into a position of having to do something to remedy it at a later point.
In order managed through that there's ways to -- both have your -- -- needed here to.
Investments in debt or higher risk debt that are likely not to go -- -- the prospects of being repaid -- not gonna change.
Investments in high quality dividend growth companies that are more stable in essence.
Their business prospects are likely not gonna change that much is as well right we're gonna see less fluctuation in this environment yeah there's always some of that more distant upside but don't -- cash and treasury.
I like the advice -- -- the warnings Jason pride -- firstly thanks to both the -- appreciate that.
