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Street Talk Advisors CEO Lance Roberts on how the potential fiscal cliff could impact investors’ portfolios.
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The -- We'll congressional leaders meeting at the White House right now but -- is.
And there's a part of the question is is there any chops are gonna come up with a deal before we hit the cliff all do we just have to hunker down and wait for spring -- I hope not.
While trouble -- straight talk revises CEO joins me now -- -- Fox Business exclusive Luntz thank you.
-- -- meeting in Washington now I don't know whether we should be excited on not what do you think will be the outcome when are we gonna get something done.
Not till after the first of the year watch how -- just related to fifty into the new year do you think -- Well -- here's the bottom line is that you know as we look at this and what's going on there's there's really no chance that they're gonna come to any resolution over the weekend and and really before Monday there's too much at stake here for the Republican side of of the bench.
And of course with a -- a lot of these the Republicans can come up for election again in 2014.
So this is a very important game for them at this point.
They've got to please their constituents so you know the battle's going to be over -- -- you raise tax rates on at what levels and of course more importantly what standing.
Is going to be cut.
And that's why don't think you're -- much much action over the weekend I think it'll be sometime after the first of the year probably in February to march.
That will actually get some type -- resolution on the table because in the middle of markets whiteness is wrong hello canned lobster and -- get an idea that it.
It's it's very possible that the markets lying in their -- and we'll talk about that -- seconds yeah that's about that has a lot to do with QE.
But what's key now is is that the -- is that the debt ceiling debate is can be thrown right into middle of this.
And that in itself could delay any type of resolution on the fiscal cliff.
Because one -- and of the need to raise that debt ceiling.
Interest think I select what let's get right to -- what specific stocks and sectors do you like.
-- you putting your money well that's an annual clients to put their money.
Well that's that's that's a great point right back to why the markets in -- hanging in here is there's a lot of this has to do with QE market makers don't wanna be out of the market with 85 billion a month coming in between QE1 three -- four.
-- so.
We wanna stay fairly defensive here the other there is risk you know I was listening to your last your last guest and she made some very good points about.
The economy and you know this is -- really fiscal cliff it's more the slope.
The stuff that happens here tax rates -- separate things they occur over the rest of the year not all at once and -- at the beginning of the year or so.
We want to be a little bit more defense of our allocation look for things to provide a steady considered consistent dividend companies that have had steady growth in their dividend -- It's a great substitution.
For incoming to portfolios but it also lowers the volatility over things like technology stocks which are very tied to market movements.
So you know things like Coca-Cola Procter & Gamble Clorox these are great companies -- have long consistent history of dividend payouts.
Don't neglect corporate bonds.
That these corporations even as your guest said just a minute ago corporations are holding a tremendous amount of cash there yeah very healthy cash wise balance sheets look great.
Move down -- scale will that your ratings.
Even to the double B space double B plus but look for companies that have eight rated balance sheets lots of cash low debt.
The yields are still good and the providing good steady income stream of the portfolio and help balance out some of the risk if the market does get hit.
Just to go back when suddenly got somebody jailed there right now you like the rolling gas -- one in particular.
What what I like about the -- gas sector in particular is is that QE.
Yes very beneficial to pushing the dollar down should oil prices up.
So 85 billion a month coming in the next year I think his -- possibility we'll see oil back up towards a hundred dollars a barrel may do little higher.
The as opposed to the excel -- as you mentioned a minute ago yeah I like the other side of this which is the -- ETF that tracks more than drillers the drillers and operators -- more sensitive to the price of -- So oil prices do go up.
Drillers like slumber -- the operators they're gonna do better in that environment.
Very quickly glancing mention the Muni bonds do you think -- -- -- up bombed the bubble.
On the Treasury's.
You know it's very likely but they've been saying -- -- bond bubble now for the last four years the product the issue becomes though.
With the Federal Reserve buying bonds at at 40000000045.
Billion a month next year now you're gonna have vote you're gonna be able to sustain very low rates and investors -- -- to have that safety the bond principal yep.
Going forward for at least the next two to three year saw would worry about a bond bubble right now.
Very -- in date thank you so much.
Lance Roberts thanks for you talk advises CEO of great stuff think -- appreciate it.
Thank you happy new year same to you while the.
