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Local investors are facing.
A huge dilemma and yes if you owned US stocks that do business overseas this includes use a stoppage and boring and listen to me you're facing.
This dilemma because they -- storm clouds over the world's second largest economy China.
After some -- -- trade data overnight but it sort of piling higher and deeper -- every day we're getting weird data from China.
Should investors worry about what I'd like to -- China creek.
The problems of China creeping into your stocks well when you have three point nine trillion in assets under management.
You're probably doing a lot of work to be on it right now Dow Jones industrials is moving lower.
But doesn't matter that not necessarily has to do which kind of a black -- global chief investment strategist -- customers.
Is -- he's got that much in assets under management at the box this is exclusive from San Francisco okay -- How much do you worry about China and if you have to pick.
One headline whether it's the Middle East or what's going on in Japan with up in comics or is -- trying to.
That really starts to creep in to all investments is it China.
Well China certainly -- candidate out and -- couple things going on with China that investors -- -- be aware of the first of which.
Economy slowing -- that's not necessarily a bad thing.
But it does mean that this country which has been the engine of growth not just for China.
But but for the world for for many the last several years is gonna contribute a little less.
The other issue with the Chinese banking system which were people word about the extent of bad loans -- -- -- credit growth.
That's an important issue because if he is a problem.
It's not just a problem for China it's something that could impact the broader global financial system.
OK well then I'm not hearing you really say that Ben Bernanke is the number one worry here today we're getting a lot of news out of the Fed we -- the minutes and now Ben Bernanke is going to be speaking.
Closely is a guy like you going to be watching what -- cents.
What we're gonna watch it very -- letting them on the market has certainly been driven by interest rates been driven by fed policy the last several months we expect that to continue.
But I think the truth is if the Fed is going to begin to taper which obviously he's been unnerving investors have been over the last few months.
It's only gonna happen in the context of an improving economy so what this does -- -- bumps along the road for stocks.
Long term -- the -- tapering -- the economy's getting better and that's probably positive news for equities.
OK let's get to equities and talk about what you like -- we talk about say for example.
Exchange traded funds they're extremely popular lately you guys do a lot of them over where you are an -- so the iShares for example.
That you're looking at right now let's start with what's happening in emerging markets because certainly there are opportunities it means that you're not buying at the highs because.
We know that some of them have been beaten down but there's one in particular the front tier 100 market.
What's in this let's talk about it you tell me why you liked -- so much.
Yet this is a really interesting playing at a time where that I guess that the term frontier markets may be -- that news summary your viewers.
Basically this refers to countries that are not yet in the emerging markets so a lot of countries in Africa the Middle East what's interesting about.
This part of the world two things one.
Growth is often accelerating while as we know it's slow and in many emerging markets.
And these countries tend to be very uncorrelated.
With the global economy.
So they really -- and diversification to portfolio these are markets that are hard to access from the passion can do it happened ETS.
Actually let me -- it actually held -- much better let me let me jump in here we're talking about and and some of the most widely held in this particular ET -- Kuwaiti stocks that qatari stocks Nigerians stocks.
So again there's a little bit more risk that we can show the list here we have.
Caught -- Telekom a bunch of other national bank of Kuwait.
Just remember you guys in -- a little bit more risky right.
Absolutely the -- going out on the risk curve here in terms of the volatility.
But one thing to point out for investors.
Is that wall -- going to be volatile.
In the individual companies.
Well it does help the overall portfolio.
Is it these -- companies and countries that are not that integrated into the global economy.
So they don't all move in the same direction at the same time which is often the case with the other parts of the equity markets.
Let's say people are too scared to -- to Kuwaiti banks you understand that how about US companies where is there -- real opportunity.
I think the US -- couple places we'd like we we still like the large in the mega cap names.
They're the cheapest part of the market they're the most profitable.
And we think that's a place where investors want to be overweight -- -- -- -- energy -- -- -- -- -- fourteen month high -- today.
Energy prices are not going down the way the rest of the commodity complexes.
The stocks are cheap they've got a relatively good yield that's another part of the US -- -- I -- -- -- -- -- -- -- -- Put up another -- the iShares broker dealer ET -- the people want to go into financial names with a little bit of a twist this one just.
Piles and all the broker dealers everybody from the C a meet at Goldman Sachs to America -- to CBOE holdings -- in there.
-- had a beautiful rate of return -- good to see you thank you so much.
Thanks -- -- -- cost virtual black -- global chief investment strategist.
Kuwaiti banks okay he's he's OK with that closing.
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