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Turning to the global economy the International Monetary Fund has cut its growth forecasts for the year this is globally.
What are they cut it to three point 1% from 3.3 percent Y because of emerging markets and how much they have -- down by the -- they -- still has places all around the world where he thinks you can still make money using US -- -- the zephyr management managing director and Jim.
First let's go by countries because yesterday at this very time David winters and you know.
Was sitting in this chair and he said he like Brazil and Canada -- not necessarily all of merchant but you want different countries.
Yeah well leave the place to invest in emerging markets is different going forward than what -- used to be.
And I wouldn't really agree with either of those the result model doesn't work anymore because it was export driven with China China's slowing down.
There's simply isn't demand for.
That the of the Brazilian exports that there used to be.
And frankly they've got a problem down there in in terms of economic growth is basically gone to zero.
And they have high inflation and the currency is not doing wells -- stay away from present yeah I would stay away from Brazil I'm not negative -- Canada but they're gonna have a problem in terms of their exports also is the global.
Emerging world slows down somewhat of course -- exports to the US.
We'll do well Russia has decelerated tremendously China has decelerated.
-- has -- -- So what I what I say is I've I I've I still I still like India they've got some work to do.
But India actually has a better demographic.
A -- -- China over the long run in terms of growth.
But you -- -- gets more of the frontier.
But markets which are aware of the emerging markets were -- years ago markets like Singapore Thailand.
All of of not non Japan nine China Asia.
-- those are the higher secular growth mark.
All right we're showing right now the iShares -- index that you could buy an ETF.
Or you can buy US names that do business in these countries Wright is one strategy better than another.
No you can do both depending on your domestic profile if you want a sort somewhat diluted play.
You by the US multinationals and they're they're fine companies many of them -- dividends and I wouldn't try to talk anybody.
Out of that but if -- a pension plan a large institutional investor you're more likely don't want some direct investment in those economies.
We -- right here so we'd be remiss if we didn't kick your your investment minding your talking about a different approach these days and that is of the Barbell approach so what's on one side what's on the up.
Okay so we're talking about the US economy the US economy is doing well.
Reasonably well profits are growing I think the reporting season we'll be respectable.
Stocks are fairly valued not not overvalued and they're not a lot of investment alternatives to stocks yet on the other hand.
It's been a low quality route probably the lowest quality stocks have have that got done done the best you have a risk here that the credit markets get away from the Fed with the ten year treasury.
Going up higher than the Fed would like which could cause destruction so what I'm saying is.
Is you and -- one group of stocks that benefit from the US recovery those would be did domestic companies -- those.
And -- -- to financial she really like let's get to those yes people love to hear the names that you look right now so Bank of America has tremendous.
Leverage margin leverage as Brian -- he has sucked so this is a Barbell approach here -- -- on one side GE the other end Johnson and Johnson and Bank of America and Raymond.
Banks can and can basically charge more faster than they have to raise what they pay depositors so they're spread goes up and their margins grew up.
And -- plus Bank of America has tremendous leverage.
At a corporate level is Brian continues to clean it up and shrink it down at Raymond James and not only get the leverage of the banks.
But they get the leverage in terms of the retail it's basically -- retail brokerage firm and what they do -- they can raise the prices for debit balances.
Without raising the prices they pay for customers on the credit balances for awhile and their margins -- -- tremendously so that's why you buy those.
And then to protect.
-- from from any sort of dislocation in the credit markets and in the financial markets you want owns some of the stalwarts like Johnson & Johnson -- either have a dividend global exposure.
And and and are very high quality.
So so but then these names tend to sell to the emerging markets or to the frontier my guess you call them Jim great to see you thank you owes much -- and a lot of zephyr management our good -- here at Fox Business Network.
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