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Capitalistpig Portfolio Manager Jonathan Hoenig and Steel Vine Investments CIO Spencer Patton on the impact of fiscal cliff uncertainties on investors...
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Talk about stocks which got thrashed after word that President Obama.
Was putting no new fiscal cliff proposal on the table not with the US closer to diving off the cliff than ever Monday is shaping up to be a pivotal day for the markets.
Should you should investor look for their emergency parachute.
Or should just stick this thing out joining us right now Jonathan -- portfolio manager capitalist -- dot com.
Spencer Patton chief investment officer -- steal -- investments Jonathan and I have no choice but to stick it out -- -- -- -- with a 401K.
So what do I do I think get out right.
Well what the president is putting you through at what Harry Reid is putting me through a mean period thinks the next 24 hours are important I mean you're supposed to -- an investor be thinking.
Long term and delete was -- in the last minute like his.
Is really cruel and sadistic to investors it's one of the reasons why I think is -- a tremendous drop today.
And you mentioned Monday night is being volatile mean that the holiday today it's a thinly traded to begin with.
When -- fiscal cliff on absolutely occurring here you can bet it's going to be even more volatile come Sunday night.
The Monday morning as well that's our people ought to be dumping stocks if I were in individual sock -- to me this is not the time to try to sell them or will we see that.
Yeah you know I think the important thing to keep in mind here with stocks is that one part that we have to worry about as the fiscal -- we have taxes and spending to worry about -- -- but what the real issue -- in my opinion is that debt ceiling debate that's just around the corner oh joy we joy.
Yeah if if we get some deal with the fiscal cliff which I think we well -- our politicians are the worst but even a blind squirrel away occasionally find and that and so they'll get this done sometime by January 15 or something like that.
And then if they do not extend it's that the debt ceiling and you'll have close to Armageddon at they -- -- wears -- -- -- take issue what you said about our politicians being the words are congress is the best congress money can buy.
And don't think -- -- I think he's talking about Armageddon because of the dead ceiling I mean it.
I would be terrified if I were not in the market of put my -- this but there's gonna have to be buying opportunity if people panic and -- Well -- you don't.
Which market -- I think that can really be the story of 2003 when people are scared in the headlines obviously is scary to.
The scary they have a tendency to sell stocks and buy bonds that the safe move.
I think actually the reverse is going to be -- 2013.
In stocks were -- -- quite attractive.
Vs bonds -- highly manipulated market that government has -- did try to hold interest rates low.
Once inflation's back to actually show its head I think that bonds -- supposedly safe exit that could be where the real danger militant in 20%.
-- Miller Spencer responded -- I've heard similar comments for the last four years get out of bonds get out of bonds that -- spent what -- -- Yeah you know I don't see anything compelling about stocks here I mean there's no panic in the market other than down a 150 point day and then word we're just like seven or 8% off of all time highs for the market so if you had a sell off of twenty or 25%.
That would get me more interest that -- stocks but there's no valuations here that are compelling.
Jonathan -- and let me just say -- -- yet you haven't -- panic but -- actually really haven't seen a lot of investment either.
Most at Joseph six pack investors actually sat out the rally -- -- sitting in bonds that -- put money into bond funds taking it out of stock funds -- Even with today's sell off most average investors are actually.
Under -- message to the market as where they've been in recent months.
Years -- -- and I heard one analysts on a competing network actually say he expects a correction you know it correction be 10% he was saying five to 7%.
After the first of the year is people panic and try to figure all this out you don't think that's gonna happen.
Well stocks correct it's what they do but I think you have to try to look beyond the -- they headlines.
And look for 2034 to percent move.
That can't happen when you're trying to trade -- here really reads -- sound -- but I do think that if you're right ready that withstand some risk with a portion of your portfolio stocks are the best asset class and downright Spencer you have twenty seconds in the last word.
All right well I think the risk reward is just not there I mean if if you're looking for twenty or authority or 40% in the stock market I think that's what we've seen off of the lows from 2008.
We've had that generational move and now it's time to wait and step aside.
By housing invest in gold invest in commodities a lot of alternatives stocks are not the place you want to be.
Find a different -- that that we'll still do well in inflation I would buy housing.
Here spent -- and give you one word plastics Spencer -- Jonathan Hoenig thank you very much.
