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StreetTalk Advisors CEO Lance Roberts on the market’s outlook and how investors should adjust their strategies.
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Liz thank you very much we're gonna go to Lance Roberts now from street talk advisors.
Last first it's a question everybody's been answered -- buying are you selling -- you holding what are you doing.
But they -- -- put a picture Teddy up over my desk he just became my -- so great I agree with so much of what he just said that's awesome.
-- -- the reality is is no we're not buying here when I was here with -- -- it back in August we talked about the fact we're waiting for cracks in the market -- -- election.
We got that we started buying in November December.
And at this point no I'm not adding any more here the markets are more overbought now technically then we've had since the previous to the last financial crisis in 2007.
And is overbought -- -- seen the tops the last three markets -- the last three years so.
The risk here is high margin debt is now at the highest level since 2007 yields are at historic lows and high yield bonds.
The risk is kicking up here so we need to be a little because it great to new highs are great this is awesome.
But you know the reality is is -- is coming up here we need to build a cautious you know one thing that's very risky is that in search of high yields a lot of people of gone out on these junk bonds like we haven't seen a longtime Wall Street Journal's been writing about it.
Are we in danger of a lot of investors losing their principal on these.
Well what what that is a sign -- his -- yield chases as a function occur when people are are chasing yield they think there's no risk right -- -- -- -- no way they can lose money.
It's it's all good -- we've got the Fed in here at liquefy the markets and so how to lose money.
Will you and that's what is talking about a second ago the yields on high yield junk bonds are at the lowest level on -- current.
-- -- that the period of when we're in the market in 2007.
At the same time you have record margin debt.
So those two things combined become a real problem because if we get a cracks in the market of any type of magnitude because of -- European crisis or sequester issue.
All of a sudden.
Those margin calls begin to take -- and it begins to full of creative force liquidation and people have to dump stocks early start dumping bonds he dumped stocks to dump everything.
And it exacerbates the correction that could be dangerous as I type Lance I'm sorry -- -- here because we only have time for one more question rates.
What kind of -- pullback in the market are you waiting for before you buy -- and where would you buy specifically if that happens.
Absolutely look probably sometime this summer I would expected ten to 15% correction very -- what we've seen the last couple years.
Really nothing more than just kind of working off of this overbought condition and where would you buy a what -- -- -- -- that more eggs -- -- exactly.
Things like the STY which is the dividend yielding stocks blue chip stocks.
With good dividend yields and good growth stories -- good -- earnings.
Those little weather whatever comes up we are extremely stressed in the cyclical bull market I can't tell you how long it's gonna last as long as the -- here is great.
But dividend yielding stocks are gonna provide some security for people in their retirement years Lance Robert street -- advisors CEO thank you Lance good to see again appreciate it not pleasant well housing and he has.
