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Steel Vine Investments CIO Spencer Patton, MaxFunds.com co-founder Jonas Max Ferris and Harrington Capital Management founder Kyle Harrington on the o...
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After that big is it has been today that we have been waiting for for five and a half years on Wall Street the Dow Jones closed at all time high 141000.
3253.
Points so what can you do.
To make sure that your making money along with what seems like everybody else does this really mean our economy is back on track we.
Blip on the radar screen and investors would be wise to distrust -- mistrust.
Funny power panel Kyle Herrington is founder -- -- Management Jonas Max Ferris is the co-founder of Max funds dot com -- -- Spencer patent.
-- chief investment officer at steel vine investments Spencer let me start with you do you trust this rally right now.
-- I don't at all I've I've got three really quick points to show that -- -- that's from 2007 and so you have unemployment back in 2007 at six point seven million.
And -- -- -- thirteen point -- you have food -- 26 million people in 2007 -- -- -- up to 47 million now.
The price of gold 758 or 200716100.
Now so if you look at the price of the Dow in the price of gold -- not even halfway back to new all time highs this is phony money it's bad -- -- it's it's fraudulent.
Yeah you -- the fundamentals don't support -- -- I would ask you this in question I would point out another stat which is that the Fed's balance sheet.
Was less than a trillion dollars the last time we get this now it's over three trillion I think that's a lot of what's fueling.
All I think that they you know the Fed is definitely part of the fuel the ability make another point -- -- which is.
You know I talked a lot of I'm on a lot of conference calls listening to companies reporting earnings and as we've seen earnings have come in very strong and I think that that's part of the reason why.
The Dow Jones to show -- is where it is now okay however.
When you look at.
Where the revenues are coming from.
Be careful here I'm with Spencer in the sense that be very cautious about jumping in this market in trying to continue to ride -- -- here's the revenue stream reason.
A lot of the revenues and I'm talking about sixty to 70% of the revenues that are coming.
To the big domestic dividend paying companies in this country to Colgate to the world the johnsons and -- the world this you the Staples.
Are coming from the international market the Indonesia's of the world the Brazil is a little about what I'm not saying this is anything wrong with -- all I'm suggesting is that.
Be careful about thinking that the demand is coming from the domestic marketplace.
I think it's did Dow Jones is being reflective of the international market it.
If the -- not saying what the US economy is doing now back per share Janice do you care and when you're buying stock do you care where the revenues coming from.
You only care about the future earnings stream in fact where it is vaulted the gold has absolutely zero bearing not to be negative above the previous guess that's that's a completely irrational comparison because it doesn't matter what the price of golden girls of the -- -- that's not hear you but for now.
Our stocks more expensive than their war to three years ago when -- was under 101000 shore.
But they are cheaper than the previous two booms one being awful 2000 bubble and in -- 071 so.
If you're paying for earnings you're paying a better price -- -- -- in the past -- protect -- from -- twenty to 30% slide if we have another recession no -- at all.
But it's a better value boom than the previous ones and individual investors.
Have recently started piling back in but they're not really given out for like three or four years now she really can't say.
So much money -- -- -- the market like in 99 so added it's not everything you just sat right there would you tell the average investor.
That they should stay in or get out right now because -- alternatives are so weak compared in the stock market even while expects -- -- government before 5% over the next fighters per year that's better then all you were alternatives including emerging markets that are hot.
Including ball bonds cash.
Real estate in most markets so it's your best of your lousy returns you know the whole lot of choice -- That's -- a lot of people hours are thinking you know that maybe everyone's gonna -- for the -- the same time.
I think this is a market that's fueled by what the Fed is doing the Fed's gonna keep the punch roll out there until unemployment drops to six point 5% they have said that.
Do you want to be at the exit before that happens or does that not necessarily mean that the stock market's gonna fall apart.
Yeah you need to get in real assets stocks and gold very much matters that that's correlated to the -- because it's valuing your dollar if you look at the price of gasoline it was 250.
Now it's 350 to four dollars all of those you're looking at your purchasing power so your purchasing power as -- Half of what it was just five years ago as that you need to get into real assets stuff like.
Between real estate stuff like gold -- little while agriculture.
All those things help preserve your purchasing power where stocks even over five years after all they don't you have.
There's much.
You put all your money a pilot commodities fighters go Powell just dollars which is the dumbest investment of all you still -- off the -- all the commodity.
I know -- I don't know what happened in the past I -- -- tell our viewers what they should do right now when they see this market at this all time high today get into they get out what is it that they should be looking for as their -- to go for the door Kyle what do you think.
Melissa I think that this is a great time to exit some positions that you have some gains -- take -- have to take some money off the table.
And -- I think I'm Dominic grieve with Spencer you gotta go here and be very captions.
And and and protect and preserve your capital by going into you know harder assets however having said that.
To -- point the alternative to fixed income market place in the return isn't there's -- take -- off the table and go concern.
-- agree or disagree with that would you tell people to do right now.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- The Russian I was a part of an emerging market from the ninety's it was up over a 1000% after the crash -- so.
Things don't look good at that you know available that's what we do well it's your chance to get out what -- you be looking for that signals that people are going to be execs I wanna tell our viewers what -- -- do what you should look for its first look you can get 45% in cash or -- but a total market bond index.
And you wouldn't get a 1% yield the stock market unlike now -- to then you should favor cash and bonds there right now the stock market pays about 2% dividend you can defend the bond index and that's a growing dividend yield now is it is it volatile -- -- does the market tanked when the economy goes on yeah but.
If you got -- time horizon over five or seven years that's gonna work out for you better get we -- -- thanks so much and coming up.
