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Varick Asset Management Senior Advisor Alison Deans on how the uncertainties of the fiscal cliff impact investors’ portfolios.
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Talk about a cliff hanger with just minutes left in the trading day the nation's toes clinging like this.
Like Kilroy right over the heads of the fiscal -- no deal written in stone but.
The market seemed -- look at the slower -- here a 139 points for the Dow Jones industrials that there may be some type of deal but.
Forget that what's your portfolios next move be regardless of what happens joining us now in a -- -- -- exclusive Alison Deans.
The senior advisor at various asset management and we've -- -- -- because -- You're so good at this kinda stuff we thought let's let's get what we should invest -- if there's no deal what we should invest in if there is a deal for -- what do you think what's what's your mind telling -- I think there will be deal I think there will be compromised if it doesn't happen tonight -- do people haven't sometimes in the next week or so -- decent extend some of the benefits.
Treat some type of deal and my sense is he'll be compromised.
From both parties -- -- which is actually governments postal work is just a shame they wait.
For the very last minute -- all sort of on ten nervously to see -- -- -- okay we have on the screen what your income what people's income is and what kind of extra tax.
You might -- -- if we were to go over the fiscal cliff and as we let people absorb.
These numbers.
There also bunch of other issues you know eight.
100000.
Pentagon workers could be furloughed all kinds of other issues where emergency unemployment benefits.
-- might be ended so.
There are lots of complications but let's talk about people's portfolios and if we were to go over the cliff which you don't believe is going to happen but if we -- What would you be investing.
-- stick to being very.
Conservative that is there's a good chance we give into a very.
Slow economic growth environment for awhile or -- into -- recession and that type of environment you want to be in very safe and secure stocks.
And you wanna have a more conservative -- -- you want to be invested in high quality fixed income securities as well as the most conservative equities and probably not.
Be that global -- -- orientation how would you characterize picking a safe and secure stock.
And -- a large multinational very strong balance sheet very strong cash flow.
You know high dividend growth rate very strong dividend payout rate is well so.
When a solid blue chip large cap type of companies that treasuries and -- the -- -- kind of prophetic figure if any quick frankly.
Because I do think this will be resolved I think treasuries going to be one of the worst investment -- in the next few years.
However this -- -- into recession there's a flight to quality never -- around the world goes into US treasuries -- Which is exactly what happened the last time we got our credit downgraded here in the United States Michael and I were just talking about that Michael Wolf -- but.
Let's say there is that deal.
To be a little more risk on at the moment that's what would you be investing in in that case well my sense is -- -- -- equities because I think corporations have not been spending they've not been investing if they see that -- certainty and clarity out there and that it's knocking me.
Draconian tax is coming out I think there's a tremendous amount of pent up demand to invest in their companies to buy stock -- make acquisitions.
All of which bodes well for equity that many of them happening on upgraded their their old -- -- -- their computer systems that you would think that there would be that cycle -- finally kicks back in action when I think they've been sitting in the hands waiting to -- was gonna happen Washington is right now the each.
Of mostly infrastructures 1819 years is the oldest going back decades so there is a tremendous amount of pent up demand but right now.
Your operating as if we will have to deal and what's sort of I was like -- people -- your your side window trade.
The riskiest little slice of the investment pie that you say okay that's sort of -- money where you'd throw it out there and say I'm gonna invest.
-- I would say they're they're two areas one I think people should be going down market a little bit market capsule I would.
Look at mid cap and small cap and they've really been underperformance in the past few models of Russell has done very nicely this year on this -- promising from a glass -- -- the Russell over the past year up 12% it's bested the S&P 500 you -- think it'll do even better that I could see it significantly outperforming -- big.
That small cap and -- suggest been since 2008.
Much weaker companies I think emerging market debt could become very interesting do you look at.
It GTQ that's sort of I'm looking for great companies going through bad times are rough times -- if you looked at Starbucks in 200820097.
It's eight dollar stock.
Look at it today.
And you think to yourself have I'd just gotten in there and it's Starbucks wasn't going -- just a good company going through about -- yes and that.
Mean I tend to look from an asset quell asset class perspective -- -- look at equities vs fixed income -- fixed income riskier equities global vs domestic.
But I've always thought some of the best ways to make money is accompanied it's going to -- time getting better or mediocre becoming good.
Whose excellent companies continue to be excellent what they're safe investments that don't always give you the upside feel about Munis.
Can they they -- risk with the fiscal cliff but my sense is if that fiscal cliff is resolved gives you continue to own -- and you have aging demographics the demand.
For Munis if he's gonna continue to grow so I still think -- -- place -- -- some money.
Predicting for those us in higher tax are the kind of person takes chances on certain commodities pure play commodities I think everybody should have some exposure commodities that I tend to look at commodities much more is inflation hedge.
Which is if you own a basket of commodities is a good way of offsetting some of the riskier equities also poured dollars today do what -- -- of gold tends to be more emotional investment that some the other commodities there is industrial in global demand.
And so they're -- adjusting to me that I had to tell people to take a basket.
Approach to looking at commodities based on global growth in demand for commodity based products.
I have a nickel and zinc I was pickles.
I think you've attended and industrial usage definitely -- happy new year thank you very much for joining us today.
Alison Deans and senior advisor at Barrick asset management --
