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-- very much the market following Europe lower but Scott Wren says if Cyprus is taught us anything.
It's that it's hard to keep a good market down he says that combined with a reasonably priced stocks means if you're keeping your money on the sideline your missing now.
Joining us now to -- senior equity strategist for Wells Fargo advisors.
Thank you for joining IOK can I quote you on something real quick because I'll take the negative view here but the the devil's advocate you actually wrote in your equity strategy.
Credit standards are still tough in many homeowners are stuck in properties with -- mortgage is higher than the value of the property if that's the case.
Why do you bullish on stocks seems to -- people around the money right.
Well that's it that's it that stat is true Adam but I think it's a far fewer people are underwater on their mortgages and I think just the general feeling I think a lot of us and you know me included.
You know -- under estimate the power.
That that rising home prices have on consumer spending.
And confidence and while there are still lots of people under water upside down on those mortgages there's a lot.
-- people who have that's situations been relieved.
And I think that's going to help but think it's played into stocks I think it's played into a consumer spending and I know that there have been other analysts who say they expect some kind of pull back.
And you you would it normally expect a pullback in which he could die then -- you're saying it's a mistake if you're looking at a time horizon of twelve months or longer.
To say sit I this out and wait for a pullback -- time is to get in now right.
You know you know higher -- I really do because while I would love to see what a pullback I'd love to tell you that hey we're gonna have a 10% pullback that because I would see that is nothing but an opportunity to -- But these pullbacks I think you're going to be pretty shallow the -- the markets held in here really well certainly we have a lot of clients who have money on the sidelines you know we want them to get invested -- whether -- dollar cost average or put a third in our just get something -- -- because we have a lot of under invested retail investors.
That our our clients and we definitely think over the next couple years stock market's gonna continue to work its way higher you know we've been -- trim -- -- the first two months of the year a huge amount of money has flowed into equities globally but a lot of that's been coming into the US.
Markets not necessarily that the good old fashioned brick and emerging markets those countries seem out of favor right now -- their markets why is that.
Well I think that's I think there's a couple of things going on one is they're still planning a global turmoil I think there's still lots of questions over.
China I do they have a property bubble that's going to burst is certain economy going to stumble then of course share as you mentioned Cyprus.
You know this this European -- crisis is nowhere near over so I think while our bond market has traditionally been.
A safe haven and certainly you know we've seen a good bond market rally here today I think our stock markets the same so I think people are counting on.
Modest growth with modest inflation out of the US that's attractive relative to other places in the globe so I think money's been flowing in.
But I think our domestic investors are also slowly starting.
To put some money to work here now you're overweight consumer discretionary -- -- the consumer was -- didn't have any money why are you making that play.
Well I think that -- confidence not only from the consumer but from businesses as well as investors is going to improve as we move through the year consumers have still been spending money.
The and so I think the consumer discretionary sector over although over the last eighteen months has done pretty well I think it has more to go and things like he look at home improvement retail.
Been on a complete terror but in our work it's still looks pretty good -- underweight financials I've got a cousin who works at Wells Fargo advisors it seems to me that maybe you should be considered reconsidering that -- Well you know we've we've we've -- -- Under -- in financials and probably that's something that you know we've been looking at that discussing that quite a bit.
Along with our our target which we've said as -- -- slight upward bias but GAAP financials are looking a little bit better and I think that's.
If you if you believe the global what the economic situation that -- -- recovery is going to continue.
Probably financials deserve another look certainly diversified banks which are big portion.
Of financials those looking better and are -- -- there were recommending some of those all right Scott -- there's some all of this up -- you're saying if you sit on your cash on the sideline Jamaican mistake get into this markets and they get very much you need to get some to work thanks Adam.
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