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Haverford Trust CIO Hank Smith and Cantor Fitzgerald head of U.S. equities Bill Nichols on the outlook for the markets.
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David let's bring in our market panel Hank Smith and bill Nichols Hagerty wiping your brow after day like today or raising your eyebrows are shrugging their shoulders.
Well probably shrugging because look I think I think the markets do for a -- I'd love to -- but annualized January February's return -- -- -- but that's an idea sky it's not gonna happen.
So it's due for -- it'll be healthy we don't and we also think we'll be short lived because there is a ton of cash on the sidelines.
And a ton of short term bond money.
That wants to participate in this market but -- little bit afraid of chasing it here so corrections or or pull -- will happen but we'll be short lived in our opinion.
They'll let's talk about the money in the -- is a lot of that money is enhance the retail investor they've been -- for a long time now for years now they've been spooked ever since.
20082009.
It what's it gonna take to get the retail investor back -- is it gonna take a major pull out because they're afraid if they sort of look at.
They're they're on a ledge and they're wondering whether they're gonna fall off or whether they gonna fly away -- and frankly they haven't been able to make the decision yet.
I think you're right you look back to awaited -- nine and and really scared a lot of people and I think people been nibbling getting back in a little bit you know to the extent that there -- for a one -- are not movie stuff around that quickly so I think there's still participate in the market a little bit.
But there's a lot of concerns and you see you know you read the headline risk and problems in Europe and the sequester and we have -- fiscal cliff and all these things came to pass -- In the market as was stated earlier you know almost 7% for months of the year -- a nice 40% plus move you know it's been going cancel that sort of negative sentiment.
Bill that was a great answer which he didn't hit my question which is what is it gonna pay for the retail investor to get back -- -- pull back or something else.
Well my answer is they're already and they need to not be in as much as you might hang on security and -- sort of regular investment vehicles I don't think you know we look at the emotion -- -- -- classic example was.
When your cab driver says I wanna in the stock market that's one year over bought you wanna sell.
And yet you haven't heard the opposite where am putting all my money in a mattress but -- it's been now for five years since the bottom and I think you know things are turning a little bit but there's -- -- up negative sentiment which is allowing us to rally.
Hank where are you putting your -- money and ending your own sort of portfolio -- show us some money first talk about how -- allocate them we'll get to specific.
-- Well sure -- still think there's a great opportunity and dividend paying name dividend paying names throughout every S&P sector you have companies.
Solid blue chip companies that have dividend yields better today has -- digital even.
-- -- the gap just upped its dividend and a big way it would that mean that companies are more confident about.
-- at less worried about the sequestered for example that they don't feel like they have to hoard their cash at this point that they can give it out the form of dividends ex apple of course.
Absolutely dividends and increase -- the dividends is the most tangible statement management can make about the confidence in their fundamentals.
And the future so while we think it is a great confirmation of of what's going on and called.
It would fundamentals and internally.
And I like to point out we had a lost decade in returns in the -- -- but it was not a lost decade in terms of fundamentals.
In terms of earnings growth confirmed -- dividend growth.
And to David's question what it takes to get the individual back into this market.
Sadly it's higher prices they they -- they need to see the Dow higher before they start to feel comfortable that's a sad commentary on and on investors but that's the reality.
All right well bill one thing that's lower right now is gold and the a lot of people are wondering whether that's telling us something.
More than just about the price of gold and and future speculation -- but whether it's telling us -- give a about the Fed.
Perhaps gold going down own name is is a belief that with the best intentions of Ben Bernanke and some people think that he's he's talking about more money bring.
He's reached the end of -- -- it doesn't seem to be turning around unemployment doesn't seem -- turning -- general GDP growth.
Is that is the price of gold telling us something about what the Fed may not be able to do in the future.
All the -- -- -- little bit of a fear indicator this also became its own asset class of people kind of moving into it as an investment vehicle not necessarily as an inflation hedge.
So that's interest -- but it's not just gold is seen crude lot of commodity selling off.
And you part of that passes through to -- the manufacturers who then you'll benefit from that.
I -- is no consumer out there that doesn't like they'll lower crude prices to -- -- that that.
Comes -- at the pump -- that cheaper gas prices so you know there's there's a bullish side to that as well but you know Woolsey I think Bernanke the issue thing's gonna be at what point does he have to raise rates you know they're gonna wait.
Probably well after the inflection point -- you know they -- but that'll be the -- -- and and you know you mentioned dividend stocks and with interest rates as low as they are.
That just makes any move on the dividend front that much more meaningful.
How can listen thanks very much good to see you -- we appreciate you what joining and Hank Smith and bill Nichols good stuff guys thanks a lot with the.
