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Sica Wealth Management’s Jeff Sica on the outlook for the markets and the uncertainties impacting investors’ strategies.
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Thank you -- So the looming fiscal cliff could be partially to blame for this disappointing retail sales data.
As well as our fading Santa Claus rally.
Joining us now as Jeff cica founder president of cica wealth management -- it's great to have you on centenary -- -- next.
Businesses and so this is what I'm thinking of with this disappointing retail sales the market's going.
What a disappointment.
But at the same -- are watching Washington and being so critical of government spending -- to rein in spending have to rein in spending it's so difficult for the federal government yet.
People are wary of all the uncertainty economic -- the high unemployment out there.
And -- keeping their pocketbooks closed during this all important spending season DTC that is an interesting perspective.
Keep it interesting that.
-- -- I I agree -- I mean I think at this point it's it's.
See you here you have the Santa Claus rally which is one of these market phenomenon that makes sense and told doesn't that works until doesn't.
So everybody's thinking that coming into this this season we would have the typical one point 7%.
Increase in the S&P 579%.
And time it's done that now we're dealing with questions.
That are gonna remain unanswered and -- January so that uncertainty.
Makes investors anxious anxious investors sell.
Right well.
Should say -- that -- my question -- you -- four trading days left basically what should we be doing.
I mean -- not let people living dividend stocks they have run ups we get rid of them and he -- -- cap gains now because god knows what's gonna happen next year.
What should people be doing over the course the next couple -- I think people should really look at their capital gains I mean honestly doubt that this whole buy and hold sentiment.
Of riding out volatility make sense to a point but we're out of we're at a point now where capital gains is going up.
So there are gains -- and you review your your portfolios at risk it makes sense so look to take them and then repositioned move one we find out what's gonna happen.
I have to tell you I think stocks -- the place to be if you look at the other asset classes I mean -- -- doing nothing interest rates historic lows.
Stocks even emerging market stocks those economies outperform the US easily.
A lot of strategy there's a lot of opportunity can take advantage of so if you wanted to go heavy equities in your asset allocation portfolio.
How would you recommend it.
Well I think -- there equity because bond yields are as low as they are there's this.
Oceans of liquidity.
Provided by the Fed once the feds seized control of the markets -- provided this liquidity it's not going into the bond markets going.
A lot of it's going into the stock market -- that being said.
We have this crucial dated January 8 which is.
Unofficial start of earnings season.
And I think if anybody's gonna begin to accumulate bigger positions.
You have to really see what's gonna happen with earnings.
-- we're constantly waiting to see what's coming around the -- Jeff I need.
It's the -- certainty about the fiscal cliff it's the uncertainty.
About specifically within the clip tax -- It's great I think that nobody knows what their tax bill for 2013 is going to look like right now so at some point you just have to say this is what it is.
I only have so many years until I retire and need to make my investment decisions risk is part of the game this is what I'm willing to invest.
What's your best bet.
Punches I just think if if you're willing to take the risk there's no doubt that energy stocks to -- we're seeing the spike in oil prices today.
I think this is gonna continue with the energy.
And the margins will improve with the energy companies.
But disagree that there you're basically saying try to -- some -- -- last week.
Check on -- capital gains and sit tight pretty much to Ginnie start listening to what these companies are saying and that could be your buying opportunity.
Right because you have to think back to what these companies were saying.
Lester -- last quarter.
They're -- they're not overly optimistic they weren't doing back flips about their future.
So unless you honestly see you know waving his hard you know sometimes waiting is the best investment strategy there is but you have to really begin to see.
Whether they're going to be able to endure.
Brawl because at this point most companies we have to face the facts most companies are making money because of cost cutting -- And -- that cost cutting continues without any growth.
Then it doesn't really -- being over overloaded and stocks I think we have to really look at.
That at ways to just be ready brand in the best place to be -- My company's -- is leaning needed and then again right now right and I and -- his.
But I guess that's why did -- have a debate I I I think that catches you know it's failed -- January analyst okay -- -- -- -- a -- lot of.
After they and I agree they are -- mean -- companies have have have been able to manage GPS to such an extent.
Where every quarter they're cutting more and cutting more and cutting more.
Now we're at the point where as if they're able to prove that this made sense all this cost cutting -- are going to be able to show they could grow.
That's why this is to make or break quarter I know you don't a lot of people say -- was last quarter but.
Corporations filling with uncertainty really shows that it's either gonna happen now or we're gonna be in for a long -- with us.
-- seek a pleasure to have you are -- -- do it.
Check up and see what happens to be found a few weeks you can on the -- weeks that -- -- -- it.
