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Raymond James Chief Investment Strategist Jeff Saut on investment strategies for the market’s rally.
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Thank -- very much.
All right well first guest is not concerned about the these are record highs on the market he says stocks -- and this year hired them where they are now.
-- saw Raymond James chief investment strategist joins us now Jeff thank you.
Hey listen the last time -- -- on the program that was just prior to the State of the Union Address -- beginning a little -- mid February.
You expected a five to 7% correction we really haven't seen that do you still think was set for correctional would you do we just keep moving higher.
So his historic.
That's what -- get that -- this far into buying stampede enough about the state of the union wrong footed -- by the way would be the catalyst to give you that five to 7% pullback.
And it's just been plain wrong the buying stampede continues.
You've got a Dow theory buy signal confirmation last week when the Dow Jones Industrial Average spurted out to new all time highs.
Thus confirming what happened with the transportation average.
In January the buying power index is getting ready to cross above the selling pressure index that indicates -- stocks will be higher a few months from now.
All of that said you're subject to some kind of pull back at any time but I continue to think as I did back then that pullbacks are for buying.
You know sentiment just reported that there is money going into the S&P 500 ETFs which is a good thing a lot of the Hilton -- worrying that -- average retailers -- in this run.
So that's the case then.
-- advice to -- get in and who cares when you do.
Well I think -- have to be selective on the stock by stock basis unless you are playing the indexes.
We just had -- last week the Raymond James 34 annual institutional.
Conference with nearly 800 portfolio managers and over 300 companies presenting.
And it's -- just the retail investors.
That aren't keeping up with the Dow jones' the institutional crowd to.
Has been too cautious in this for the most part they're sitting on too much cash and -- underperforming so.
Your report is exactly right tell you could have the -- break here and does see a lot more money come piling in on the upside.
So what point Jeff does it get too expensive and assuming it -- reasonably priced now and some would argue it's not -- -- -- about boarded up.
But.
Do you just have to wait until we see that correction and buy on the dip because these stocks may become overbought.
Well I told people the few weeks ago that -- if we're not gonna get some kind of pull back what you do -- you decide how much money you wanna commit.
To equity say it's a 100000 dollars and then you break that into four tranches of 25000 dollars a piece.
And you commit the first drawn to 25000 dollars two and a half weeks ago.
Then you set a point in time be it two weeks -- month forward where you gonna commit another 25000 dollar -- -- whether were up or down and so forth.
Because according to Dow theory and according to the money flow indicators.
This bull has a lot farther -- -- -- school dollar cost averaging right okay so you're saying buy on the dips transports seems to be -- year.
Focusing your attention these days can this city southern American railcar industries -- -- planned the economy as well as -- it.
The other economic sensitive in the transports of actually percentage wise outperformed the Dow.
Year -- -- and Kansas City Southern which has a good rating from our fundamental analysts here Raymond James.
We we we've been and -- for about seven or eight months now.
And we think it's a play on -- Mexico allow the Mexican median wage in the next couple years is going to be below that of China.
And -- Mexico the theme is that Mexico's gonna be the new China for the US.
In Kansas City Southern has the fairway -- that are the rail beds if you will up from Mexico into the heartland.
-- -- -- staying very good stuff Jeff sought Jeff thank you so much for joining us we appreciate it.
To platter.
