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Market Pullback Ahead?

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    Steve Wood of Russell Investments on the market's next move.

  • Duration 3:59
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Not gonna vision so did they market pullback ahead joining us now Steve wood chief market strategist for Russell investments.

Is that really it -- a lot of people miss.

This.

We were invested into this as we look at our year forecast coming ended November early December you gather the data.

-- looking at the market in as a people 500 for example low fourteen hundreds we thought it could be a high single digits.

-- so the advice were given retail and institutional clients is.

And we thought the -- be positive.

And the magnitude -- high single -- so from a strategic asset allocation perspective.

That lets you know the direction.

And the magnitude so we think we've been a pretty accurate that.

But a lot of good news has been priced in.

Candles melt up is grinding improvement data no great shakes -- has been priced in and press more than anything you -- talking about our European earlier.

Is that Europe has been kind enough to take itself off the front page for little while down and that's given you know multi.

-- special little -- -- so they question statements are we due for a pull back a big pullback has some are predicting an end to Tracy's point if we'd be sitting on the sidelines -- -- time is it too late to jumpin.

I don't know it's too late to -- -- it depends -- your time horizon.

-- so being invested at policy arena that strategic -- -- coming into the year so we participated in this that if you've got longer time horizon.

I don't know that equities look overly stretched right now overly expensive -- you buy yourself that long term.

Opportunity but also look at what your alternatives are you get cash.

Safe haven bonds still don't look very attractive right -- treasurys so if you're being strangled in these safe haven assets.

Longer term need to look at this globally diversified multi asset portfolio because that's what's gonna get to the greater return you need so -- -- horizon.

-- -- -- but you're saying a lot of volatility which is still expected especially because Washington's involved -- -- -- so what do we didn't -- you know by some good stuff I think.

Leave it till December anywhere -- other ways where you putting yourself to sort of allow me to sleep at night.

I think right now you're looking at the US which is up five and a half percent if you look at the Russell 1002000.

Large cap small caps based.

We still think there is some upside here but it's gonna be -- to to get to that path.

I think look at Europe you know they're great companies if you do your homework and if you do your research -- going to be shaking but good cup is an attractive valuations.

And again that globally do diversified multi -- strategy looking and emerging come markets looking at commodities looking at listen to the structure.

What has those return and risk characteristics if you're gonna want prolonged period -- I -- let's say become overly.

Skeptical.

But just understand that you're gonna need to be nimble but you'll -- -- need to be disciplined in in in that but those investments.

-- you know -- you've got jobs report tomorrow what if we get enough -- surprisingly strong number does that suddenly signal will only be the Fed needs some rethink about its exit strategy on QE on the other hand if it's not as good old really disappointing that means QE floodgates -- be -- for some time and investors love that I.

I think we've been seeing this this grinding.

Reluctant but measurably positive recovery for a while the GDP numbers we can talk about those that -- yeah I think the headline number country -- over some good data.

Underneath the GDP I think the likelihood that the Fed's gonna change policy is very very remote you know -- got -- the minutes yesterday we got the perspective from the Fed.

I that a Bernanke lunch and a couple weeks ago he's very very clear.

They would have six point 5% unemployment.

They want inflation above two between the two to 2.5 to be a long time I -- it's moving now and that gets back to that earlier point that if if -- close to a 0% interest rate world for a while yet how do you look at that globally diversified portfolio.

You're gonna need to look in these multi -- risk strategies.

And understand how they fit in a total -- -- context because.

How Washington is gonna give us a lot of volatility -- markets have tend to look through that some -- -- when is that volatility you're just really quickly what worries you what could derail this whole plan but I think right now about watching ten has gotten hit partly right -- -- over the politicians that's where they do best -- but I think they're right now -- the European Central Bank has taken a lot of pressure off yeah interest rates have come down.

I would expect the the European politicians get very complacent and that could be a risk yeah some believe that's already happening yes yes Steve wood of Russell investments Ali's X -- stuff to -- -- study well.

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