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Let's get right to today's actually a Christian Laguna yield shares founder and president who says now is it time for investors to add risk to their portfolios and -- not when he's in the -- -- -- CMA.
Alan I wanna start -- because of all the people say they were shocked by the Fed's decision not you know who you say you weren't surprised at all.
Well not all I mean the feds have played this perfectly may not agree with -- but they don't exactly what they want to get the performance on the market they wanted.
And this threshold issue is very specific it's 2% and inflation -- six and a half percent unemployment why everybody thought -- -- gonna change the rules as we've got.
It's going all the way -- -- gave I have about percentage point and out of what I think they said.
7% unemployment that's what they said back in July.
I -- pretty sure is except what -- we're not bear named -- so when we get there will start thinking about it but anyways.
That's not as important the markets on a strong trend we -- announcement of nothing but guess what.
These things continue to happen the way we've been happening the last four years and it's not so -- just yesterday I think about.
The lowest we saw obviously -- straight up since and we got 6% I think there's a lot more optimism.
We're looking here Divx is nowhere near near the lowest on the -- sort like any any complacency I think there's a lot of positive opportunities still left.
Christian is polish right now and Christian -- now is the time to add to the portfolio.
I'm hoping you were saying this a couple of weeks ago when people were getting skittish and nervous -- -- you know it's really important to continue to be long term even with this on again off again tapering talked because we don't know when that's gonna happen we know it's going to happen.
We just don't know when.
And for now risk design we -- with some new highs yesterday today I think -- there's a digestion going on.
-- I'm going forward there continues to be I think a lot of bullishness for invest.
-- -- we are seeing Christian this rise in interest rates despite the fact -- the entire policy the Fed is meant to keep interest rates down.
Is there a way to -- having had been different people -- did -- you know -- that may go -- about how -- -- play the volatility with interest rates well I think got one areas to play it safer by looking at lower duration income investments.
So if you're looking at your bond portfolio one of the ways to measure your risks if interest rates change -- go upward -- a look at duration -- -- is measured in years.
-- look for I investments that have lower generation too by the way there's many TS iShares floating rate bond ETF right that's right that's a great a great -- -- it's just follow floating rate ETF for my shares we have an ETF YYY that has a duration of one point three years so there's funny options out there for investors okay.
That this is a very valuable advice to people there are ways to play things other than the obvious let's go long on German stocks or or what have you so.
As we look at here's the why why why.
It's been volatile it's lower and it's certainly not -- -- of the year do you expect that this will start to move and at what point.
Yeah -- so this is income producing asset that has 60% equities so it actually should benefit from as as -- equity market continues to rise.
In the fund itself has been out since June.
Some of -- chart that goes before that was a previous fund that was actually an oil sands product that was invested in Canadian companies.
So in terms of the -- product its main goal -- -- variety income and do it by giving exposure to equities current distribution is a little over 9%.
Okay well -- we may not know where interest rates are going right away tomorrow or even at a -- hope we do know the dollar's gonna get weaker based on what happened one on what -- -- -- That means it's going to be easier for exporters to sell their stuff -- brought.
Are there any place in the export market -- result of that.
Why I think the market in general I think that helps out that that's not party better understand the stock markets had this search I just ahead would have a strong dollar that don't it was a tour perhaps you're high just earlier this summer so this turned below 81 senior -- the back about 134.
Now probably -- 36 and probably maybe about 136 is a February -- then we could see 140.
That helps our exports that helps all these multinational corporations so that could be another catalyst for the stock market in the big big picture because the table was -- -- In the dollar even though people we've been discussing about this money printing the dollar remains strong it's kind of venue then referred to -- is that the cleanest dirty shirt of all the currencies.
But that could change what.
I could change the tables as we look further here and get back to why interest rates let's put interest rates and perspectives.
Interest rates right now and a ten year note yield on the ten year note.
-- well it approach 3% is back docket right now.
These shields right now are still at the lowest level -- -- over the last twenty years we've last year meaning only site.
Obviously Alan Alan -- -- -- its direction in which they're going I mean you look at where they worry -- know what that means they've usually going straight up.
And and the question is whether they're gonna go back on that -- no matter what the Fed does that's that's what -- -- right -- Interest rates are gonna go up we all agree -- that's just matter of when.
But the beauty of this the way it's happening is the long term yields have been determined by the marketplace not by what the feds doing.
-- the marketplace -- -- optimism that's why we went to 3% because things are getting better not only here but globally.
Well what we like better of Christian to avoid it since you are polish generally on the markets and opportunity what would you stay away from pressure -- -- -- -- -- areas that.
Maybe aren't as strong as what they should be based off hearing on Bernanke's concern about.
-- the actual data -- C economically I'm concerned about the consumer.
Stocks I just don't know if that recovery is is being felt widespread.
Some concerned four consumer -- traditional consumer stocks secondly.
I don't I just don't believe that.
Long duration bonds -- the way to go I think you're gonna have a day of reckoning may not be today it wasn't yesterday.
But at some point when rates start to rise and they will that'll be not a good thing for those who hold -- bonds that are long term.
Unless they hold them to maturity 101530.
Years out I was gonna say what what is the longest maturity would go with is that the ten year and then -- to five and two I think that's it that's a great idea I think -- in your portfolio would be good in looking at even one to two to five years out on me even trying to just keep that.
-- interest rate risk minimize by not having bonds going farther out into the future than five to ten years.
Either way you're contrarian Christian I was like that I'm not a big fan of solar stocks but it you are why yes solar has actually had a great year this year -- the First Solar ETF a few years ago TA and and that's up 90% this year I think some of it is based off of the fact we've had a lot of concerns about energy security.
-- in the -- standout pricing on some the technology is going downwards that's bullish for the stocks.
Christian -- go to Allan thank you very much Christian appreciate -- we're gonna check in with you when -- SP futures -- in just a couple of minutes well.
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