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Well -- -- -- we got markets edging higher after a string of record setting days.
Our next guest says equity markets are fairly valued at these levels but we need to see bigger growth in the economy and corporate profits for stocks keep going higher.
Joining us now attack -- commander steeple Nicholas portfolio manager.
You know Chad we have been hearing this fur -- it seems like forever now the economy as a turnaround.
Companies have to start.
Better bottom line better top line in order for this market to keep going and -- the market -- going.
Right you're absolutely right Tracy and one of the reasons why is because you're surfing this tremendous wave of liquidity.
Courtesy of all the global Central -- so for example the bank of Tokyo came in with a massive quantitative easing plan.
As well as you have the Federal Reserve it's extremely accommodative.
But -- unfortunately what you have happening within the US economy is a very tepid kind of growth trajectory where GDP is growing around 2%.
So you really need to see -- handoff between yeah this liquidity torrid rally to Morgan earnings in economics driven rally to make it more of a healthy recovery.
But the but that's probably the only point where you could see main street and Washington having to come together right because in order.
For that -- been.
We need jobs we need people to have confidence in the economy to go out and spend -- right now we don't have that because we are so unsure of what's happening in Washington.
-- frankly around rest of the world.
Well I think the key point that you just brought up with jobs so let's -- for example the jobs numbers -- great.
Private jobs right now we're currently around a 114 million Americans that are currently privately employed.
-- that number was a 112.
Million all -- back around 20012000.
So you've only created two million private sector jobs with a population growth of over thirty million over the last thirteen years.
Right and we've done so much money into this economy to create these jobs and are really expensive jobs we -- -- well we didn't create.
Let's talk about the market now because it's going up.
I can't tell you why I don't know many people that can really justify why the Smart keeps going but it -- got -- -- it and I know you like technology what pieces of technology do you like.
So we're value investors OK and we are looking at technology as a as a point of being in the value side.
So mega cap technology names like IBM.
Could perhaps be good scenes of opportunity for individual investors' portfolios.
IBM you're saying basically struggling with their top line growth which is why your comment about you play right.
But so you see this company turning things around them.
You know look at the IBM is a play on the global economy as well as in United States that's more conservative type of investment.
For the tax side so you have a company is trading around 205 dollars per share.
He should -- in 2013.
Around seventeen dollars in earnings 2000.
To nineteen dollars and earnings -- -- get a proud probably around 2% dividend within a dividend growth rate trajectory of over 10%.
So -- BM is a more conservative way.
Of -- playing a recovery.
And quickly you are overweight investment grade corporate bonds and you're suggesting -- duration of four -- five years.
It seems long to me now.
Well you know the average kind of to -- Fort -- to ration a fortified years actually is in the intermediate kind of maturity.
So what we're advising investors to do -- take -- long dated paper.
And perhaps go down to more before -- -- investment -- kind of a portfolio and also to move off the quality spectrum.
Perhaps look at your high yield bonds and be a little bit more circumspect about.
That those quality -- and perhaps sell -- as a replacement for more investments.
To bring that duration in a little bit that makes -- -- a little bit -- and it's hard Atlanta with Stephen Nicholas thank you so much for taking a time thank you Tracy pattern I was.
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