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Gaynor investment counsel -- -- manager pat McCormick.
And Robert Linda Chavez capital CEO and CIO -- -- -- Robert let's start with you on this topic you say.
To keep buying.
Emerging markets but investors have been leaving are -- markets in droves with their checks.
How do you -- it to how she we stated how should we say it emerging markets when there's so much geopolitical risk out there.
-- -- I mean this is the benefit that long term investors have right I mean if you're a money manager managing a mutual fund.
And you're getting judged quarter by quarter it's very difficult I admit to stay with that trade right now.
But -- a long term investor you have to look at the the outlook for the emerging markets.
These are countries in some cases that are running account surpluses of play as opposed to the debt that we're burdened with here in the United States they have a young and growing population right now.
And looking out long term this is where -- global growth is shifting if you just look at the earnings of US corporations right now.
The vast majority of the growth is coming from these countries so if you have more than two or three -- perspective when you're looking at markets that are trading at twenty to 30% discount to the US and growing three times as fast that's where you -- -- start shifting some of your money right now -- the news headlines are bad.
And then I get -- you're saying you know -- and she'd be the contrary fair enough that you're on the other side of this you say that this is.
-- -- in the US stock market -- a little chorus whether it's Egypt what we're seeing in Eastern Europe.
North and South Korea for instance all of that makes you say not so fast and emerging markets.
Sure sure I think we look at Egypt which is a small player on the world stage from economic standpoint you see can have ripples throughout the marketplace and I think.
Roberts points I think are very valid for the long term.
How are thinking -- Need to have a very long term view approach they need to be very selective and -- way that we approach it is looking US multinationals where they may have divisions in these emerging markets.
You have a little bit more currency risk that is absolved -- you have I think it diversification of assets and I think emerging place.
It's it's something that I would use is a very very small part of my portfolio and understand that it will add volatility your -- -- you -- wake up.
In situations like this where you have a -- were attacked the situation -- caused a lot of volatility airport foil my clients just prefer to have less volatility.
The other thing a lot of us -- front volatility of one -- city EG -- the traps that that tracks the Egyptian market is down about twenty -- -- the last six months so there's an extra pressure.
And it also -- -- -- -- -- -- met Wednesday with you because actually let's go back to the US here for a second you like technology.
One of the top performing sectors of 2012 top -- sectors for this first six months of 2013.
Is there still -- to get into technology or should we -- to kind of see what happens with apple Samsung and Microsoft.
I think -- you when you look at technology sees some what I call factually the chicken tech stocks like.
Microsoft have has done exceptionally well -- another example these are companies but before.
That -- dividend growers and now are they have a lot of ton of free cash flow very little debt.
I think they have the ability to grow their earnings in their dividends and let's face even though the jobs number was positive today more people share would rather hire.
Some type attack related services than they would people and I think there's going to be a lot of opportunity to grow worldwide using technology services.
And most importantly their payout ratios are very low as a sector -- gives a strong potential for dividend growth.
Okay actually does agree a mess and we're gonna get -- -- -- later on but that you both agree the fact that technology is actually get play Robert what else do you like SS technology.
I think energy and financials are really interesting right here I mean when you look at the market as a whole.
Yeah I think we kind of have a cap on the upper limit this year somewhere around 1670.
The 17100 on the S&P which doesn't give us a whole lot of room here so there's a lot of sectors that -- -- trading you know at a discount right now but if you look attack.
-- financials right now.
Those prayers -- I think he could still find some good relative value and to match point these are companies that have the ability to you increased dividend yield something that investors regardless of what you're seeing with areas like utilities and Telecom right now.
Are still going to be searching for yield.
He -- want to look at places for yield like technology where they have the ability to grow those dividends and valuations are still good not trading towards the upper end of the -- are.
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