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Are You Buying Stocks in 2013?

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  • Description

    Charles Schwab’s Randy Frederick on the influx of cash into stock funds in the new year.

  • Duration 4:33
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Right now yes you the little guy tell -- -- that.

The latest numbers say yes you off -- -- that's.

Last month stock mutual funds took in the most money since January 2000.

About 37 billion dollars that's a pretty sizeable inflow.

Join in the company right now is -- -- He's managing director of trading and derivatives at Charles Schwab and company.

Randi you've got your finger on the pulse of the little guy -- Charles Schwab you know what these guys are doing.

That was a huge influx going into stock mutual funds.

I asked the question is the little guy really piling back into stocks.

Well I think there's no question at the little guy is coming into stocks I wouldn't say piling is necessarily not right -- not -- it's not a flood and say it's a flood but it's definitely a pick up in momentum from what we've seen in especially during the last year lot of people very concerned.

About the fiscal cliff issue definitely -- -- -- -- their -- -- -- into very safe investments many of which -- -- hardly anything and I think.

Although January is normally a month where you see an influx of money going into equities.

This year we've seen a little bit more that we've also seen a pick up in trading activity and things like that where's the money coming from.

Well it's coming out of bond funds in some cases but a big chunk of it all is also coming out of cash investments like money markets and other things that are still very depressed in terms of interest rates together at the thought that that implies a free choice doesn't it you got cash on hand and we've got -- -- where you gonna put it.

And a lot of people -- saying I'm putting it into stocks.

It's I think that's probably true I'm I want you know too -- into this -- McClellan no not at all mean you have to also understand we've had a little bit of a pick up in interest rates when we see an improvement in the economy in the interest rates start to come up.

That has a tendency to eventually depressed bombs or so people who room who have already had a pretty high allocation in the bonds.

Are starting to say hey wait a minute and we might be start might need time to start getting a little bit more cautious on bonds.

Or they had money -- the way as I mentioned earlier in name in a money market fund just to be safe because they were worried about things like the fiscal cliff.

Well now that's passed we -- that we had it but hasn't been resolved but certainly we've seen.

Somewhat of a resolution we've seen at least a small amount of cooperation in Washington to -- get some of these big sort of you know this perpetual flow of of issues give -- also they've moved a little bit that and in the equity but the big board up pleased because just a second ago the Dow went back to exactly 141000.

That we -- that companies were 164.

Points away from the all time high.

You got an -- prediction for when we're gonna get a -- a new all time high -- from my perspective in the resource idea I'm pretty confident that we probably will I'm looking more the S&P 500 and we're looking at about 5065 level which -- as did not quite.

Just about like the Dow Jones were about the same distance away from -- potential all time high.

The question is whether or not we're gonna get this.

This you know sequestration issue resolved I think the where if there's -- if there's reason for concern in the near term it's probably coming up here in the next couple weeks.

As we hit that deadline on -- sequestration to it today at 1045 the president I believe he's going to address the question of how to get around -- spending cuts have to get.

No don't don't cut spending that much -- do this.

Now if he's successful and we don't get those sequestration spending cuts you think that's due for a good for a rally I might -- belief is that that's probably the case and I've been saying for -- the last several weeks that I expected that we -- probably see an all time high and the S&P probably sometime in March and that would be just about in line with that if that issue.

If they if they -- come to reach some sort of compromise -- they.

-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- I will say that active traders and those that are engaged in the market in general are -- I have never really left and although we've seen sort of I would say an increase in the confidence of the everyday investor in the long term investor here just recently.

The active traders have been engaged in had been relatively confident really through all of last year so they didn't miss out on the rally only the really.

Skeptics left missed out on the rally last -- well we'll leave it.

Randy Frederick who runs trading for Charles Schwab -- -- Of the industry that you think we're gonna hit a new all time Microsoft -- we know it's my belief is that we will look back for a -- effects -- much for joining us we will -- as a thank you and.

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