Planstrong Financial Forum 03-18-17

Weekend Shows
Monday, March 20th
00:54:08

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They both play and strong broadcast studios he would still play in strong financial forum will be your host. Tim Karr murdered bamboo president Roh plans strong investment minimum. Cold portions this time Bruce Morton investing. Simply fall. And I'm Ken carver at the anchor desk while Parsons is not with me today Alexander is Alex fenders CFA. Who is an analyst and plans strong or America program Alex thanks for coming is great to have you here and this means a Paulus somewhere sunny and warm now. Yeah he got spooked by the snow yeah SO the review I'm sure you're gonna have for a good week for me to be here 'cause a couple of you know. Pretty important market events occurred this week we're talking about an incident was a little bit easier to put together the outline because. A lot of it's gonna be sent around those two events that occurred. And we can just one of the events where's the interest rate you know talk about the Fed meeting and then of course the other has to do with something overseas we don't talk when you're a lot we do bring it up. Aren't quite a bit lately because we've been seeing some changes over there and undeterred by the Dutch election. And though the prime minister over their call this the quarterfinals in Europe I'm on to stem the populist movements are mobile discussed those reserve were those results and it seems like a fitting time with March Madness. On us as well OK so let's start off with just looking at what happened. In the US in the in the stocked bar markets over the last week when we've NC. So it relatively flat weak US us stocks were up a touch. You know 25 opt point 25%. On international stocks rallied quite a bit this week were about one and a half percent. And US bonds were actually up about half a percent so this is very unusual. You know usually you it's been US stocks outperforming both international and bonds. Armed and if bonds outperformed it wasn't by epic margin. An international stocks have really lagged largely US stocks in this was really a change and we'll talk about why. But you know Goldman actually came out with with an XT article this week about some of the biggest risks and portfolios is debt investors are chasing US soccer cars and they're becoming over concentrated in US stocks under concentrated in bonds and under concentrated outside the US. And so I think this week shows. Why it's important not just to have exposure one asset class but many of them because the past doesn't guarantee the future and sometimes if things are overheated in one segment they tend to lead to flows and other segments late. Now since we had just a little bit of a bomb debate almost flat the US stars what we've been looking at your today. We too weak and very little. Importance longer term. You know the direction of the markets is more important. Year to deep the USS stock market the S&P 500 in index of the 500 largest. Bubble created stocks in the US. Are up about 7% including dividends are very very good start to the year. International stocks just leapfrogged US stocks and are actually up now. I'm in US bonds are flat to slightly down even after interest so again it's it's been the same story stocks over bonds but you're starting to see international pick it up. To be interest in deceit. You know if there is a ship going forward and if it's sustainable. Just looking at your did data we seeing any sectors that are showing her some good signs are prettier rebalance the DL well. Health care will talk about more in detail leader health care has been one of the stronger performers this year. But I did wanna talk a little bit about that shift we saw since the election. Arms since trump was elected in November. US stocks are about 12%. Which is phenomenal move in less than six months. International stocks. Up a little bit less obviously the fear is that you know US first is gonna meet lead to stronger growth in the US. On meet the weaker growth internationally if US doesn't and impose some if trump imposed some some restrictions on trade. And bonds are down 2% since that period. I'm so it it has been a very very different environment and even within stocks there have been some big winners in some big losers. Specifically if you look at how financial companies have done those stocks are up about 25%. I'm more than double the peace of the markets since the election menu look at some of the more defensive. Leading dividend paying stocks sectors. Late utilities couldn't consumer staples there up less than half of what the market's up. So no active management and and targeting. Specific industries has really paid off especially since trump was elected because we've gotten kind of got away from the old. Goldilocks. Situation where you know we didn't want growth to strong we didn't want crook who's too soft. Just right so the Fed could continue to. Ease monetary policy and now we're seeing the Fed tighten a little bit raise interest rates were seen growth projections go up a bit. And this is really the kind of growth you wanna see camera at this stage of up and economic cycle and you know the the jury's still out his as to whether trump can deliver on there is a lot of optimism. But there's also a lot that's being held up whether it's the health care. I'm whether it's the tax cut there's a lot that's being discuss assessed so you know how much of that's actually baked into the markets and and the likelihood of actually getting cast. You know short term and even at all. And I think the market stole hopeful but the last numbers I looked at work you know 70%. Or so. Probability of corporate tax cut this year. On the those numbers tests have been going down I mean I think it was this high seed Jiri 85% earlier in the year so that's something that's very important for us to watch and it did become news. Increasingly increasingly likely that some of those cots or worse spending bills or knock and it couldn't come this year were all bent than non. You know it might signal the need to get a bit more defensive than the market's gonna give up some of the gains that it it she used. It anticipating these these things what are we seeing from oil over the last week or so women and also what have we seen big picture yes so arm you know. Long long story short the trend of oil has been very strong over the last. You're you're a month or so. As you know oil bottomed in the oval in the low to mid twenties in February of last year just a little over a year ago up and it and it's been strong but in the last six months it's been an pretty tight trading range. I'm about five dollars and last week that trading range broke. Armand we actually saw oil prices declined pretty significant almost 10%. And as Paul discussed last week a lot of that had to do with. Both OPEC. Forecasts as well as International Energy Agency forecasts. OPEC said that they are increasing their per on their estimates on. On US or nonopec production largely because of the US and that makes sense prices are higher than you're gonna bring some more production on line. Even though they're cutting others are are raising the same time. On at the same time on the international under energy agency. Are reported higher supply than anticipated and and so you know excess supply in in inventory. Has really kept the lid on prices going up. On and that's continued to be certainly hi we haven't really worked her way to be an important. This week there was some somewhat positive news where. You know the saudis said that the OPEC would be O OPEC would be willing to. Cut some production even more. When they meet in May. And that those that oil markets kind of song that is did a bit of a surprise to the upside and it really stop the bleeding. Comment at the same time there was less important inventory. A report in the US that dom said that inventories were slightly down. So yeah overall I think the bleeding has stopped. Temporarily. On but a lot is gonna depend on how OPEC cooperates with the supply cuts know a lot of people are concerned that. I'm just because they say they're gonna cut doesn't mean they are gonna cut. Annan and if if that's the case that a lot of the gains that we saw on that assumption are gonna have to be given up. Our projection though is that. There will be some cuts on OPEC needs higher priced oil on Russia needs higher priced oil a lot of these major players need higher priced oil to survive. You know for their currency and the government budget. On. Oil demand has been slow but rising and generally the estimates have been too low. On by about you know a million barrels per day each year there slightly under projected so we'd we do think that. The component of supply cuts and rising demand will level oil might take some time but we do still project oil. You know at a pretty good bargain it it under fifty dollars a barrel going for the dollar moved a little bit over the last week and I'm not in the direction we've been seeing lately not so you know the dollar's been stronger. Up a lot of in the hopes of higher interest rates in the US and it rates are higher here than not attract a lot of money. To the bond market right on and and that's been you know at the same time there's been some concern with Europe and European Union and the currency and whether it's can survive these elections. And so that's kind of kept the dollar strong relative to those currencies is well. But this last week and we'll get into this in more detail and in the next segment I wanna talk about what happened in Europe. And what happened with US interest rates that actually caused a little bit of on a deep appreciation of the dollar. And we actually saw a big move on Wednesday this week where the dollar lost you know one or 2% against certain other major currencies and that was. You know a real shift from recent sentiment. So even though we wouldn't maybe you expected this. If you pull the bond markets we actually had a little drop in the interest rates in the month explain that and whenever there. So I'll I'll talk a little bit about what happened with the Fed this week I'm for the third time in the last. You know decades theory they increased their interest rate target on the Fed Funds rate. From point five the point 75 up two point 7521%. It was largely anticipated by the markets calm I think. Up until last week was almost a 100%. Probability that this was gonna happen. And so the market that the Fed did not disappoint in in in raising rates but the surprising thing was. Even though they re short term rates too long term rates dropped time which is really toner into it and I did in it you know a lot of people are wondering wolf the feds raising rates while no one on bonds bulls because the reason. Short term rates and it doesn't necessarily mean that long term rates are gonna be increasing her. Increasing by the same proportion or at all and that's exactly what we saw this week to ten year bond. After the con rate hike actually went from two point 6% down to 2.5 percent. A big move doesn't sound like a lot but the big move on the ten year bond there and that's what caused bonds to do well this week that's what caused the dollar to do poorly. And the real reason behind that was the home of the Fed's hike it's being called a dovish hike. Almond dovish type means itself height but the it's not as aggressive as people were anticipate. They projected to more hikes and when he seventeen. On and a lot of people it started to anticipate three more hikes so in in one way it was a little bit of a disappointment to people who are hoping higher rates. Because the Fed really kept their forecasts the same. Even with the market having such a strong start to the year. Or when we come back our actual target a little bit more about the Fed what the interest rates bump means and what might meets the market going forward it means spread away this week and the look at what's happened in Europe with the election. Into the very presidential election and uninteresting turnout as well we'll address all of that boomer return to supply and strong financial form. This is Paul Parsons president of planned strong investment management. And you're listening to them planned strong financial forum on WRKO. Boston's talk station. If you like what you hear on our show and what media take a look at your investments and retirement plan called my office. 80889727526. That's 888972. Plan. Securities and investment advisory services offered through metro metro group member to go as I can sequester investment management is an affiliate business financial group think is located in Washington street and Massachusetts. Hi this is loving Nelson. People use different strategies to acquire enough money for retirement. Some try to do it themselves others buy insurance or investment products though sometimes will benefit the seller more than the buyer what makes sense is to hire an advisor with first rate credentials and why do investment management experience. Should have a fiduciary obligation to act in your best interest. And be paid the same amount the matter watcher invested in if these things matter to you. Call Paul Parsons at plan strong investment management to learn more. Call 8889727526. Hiring the right advisor could be your best investment. That's 888972. Plan or vision plan strong dot com. Securities and investment advisory services offered through next financial group and member former SIPC plans to investment management is not an affiliate of next financial grouping and is located at 980 Washington Federal. Okay. OK okay. Okay. Okay. Yeah. It's. But I'm strong broadcast studios and the epicenter of journalism's this is no plans strong financial forum with a whole portions president of planned stronger investment management. And I'm encourage the anchor desk and our Paula is in Florida playing some golf today so with this is Alex Bender CFA Alex is an analyst at planned strong. And let me just remind your plans start toll free number this number you can call to set up no obligation portfolio review went Alex and Paul Paul attend to monitor the meetings as has Alex don't bring numbers EDD 89727526. That's EDD 972 plants. And again it's it's an obligation meaning reconsider NCAA MIE. In the right position for what's going on today that's a big question is an hour to read more so than probably in the last several years. You know I I think there's been a lot of changes in the industry. But the need for sound financial advice and planning is always going to be important right hands you know I do encourage people who are hesitant to commit that it's it's really not much of a commitment to no obligation meeting. Can be done over the phone if necessary. And it's really just a second opinion on. You know this is where you are today this is what it's gonna take to meet your goals. You know this these are your assets are located this is this is where we make contributions to this is where we take withdrawals from. I'm forty YouTube funder lifestyle. You know this is your asset allocation is a consistent with what we might expect from someone in your circumstance are you taking too much risk or you're not taking enough risk. Are you invested in the rate Ares of the market given in our outlook for arm what to expect and it it really is that time well spent. I'm for someone to come in and does it send and as I said it's it's no commitment on their part time you know other than coming toward them office. You know offer for an hour two wins and well walking them through their financial plan. I imagine there are some things in those meetings at folks find out that they weren't even aware of their own financial situation bright in terms of embarrassments or yeah maybe there is a an option at their 41 K that they're not music hey this is a great option you know it's a it's a it's it's an income fund it it it's a much better place to be than just abroad bond market. You know maybe they're not aware of some additional options in the for a one K like assault corrected brokered where they don't have the only invest in. Say the twenty funds that are being offered by the 41 K provider but you can actually expand that choice and sometimes by individual stocks don't lock the ideas that we're talking about on the show on a specific sectors and and companies. You don't rather than just hoping that your mutual fund has a little bit of exposure to that one industry or company you can actually invest in those trends and we can help. Nominates say you kind of one of them that the most important things that that people can do is. Analyze. What what their existing accounts look like and if there if their cute you know there there's a lot of stuff out there I'm a lot of information a lot of people are being pitched annuities and insurance products and they sound too good to be true. And in many cases they are merged and so if you recently purchased one if you're considering purchasing a variable annuity an equity index annuity. Were something of the sorts. On you know common CS and we'll tell you what it is you know what weren't in an independent. On the third party that can really assess it is this something that's right at you and we've you know Paul is the ability. Two and invest in these things for clients then and rarely does he if ever especially in the last five years because interest rates solo. And when you're buying something like that you're essentially. Buying a long term bonds whether it's advertised as that or not. You know it's a conservative investment it's gonna behavior like bonds and our high expenses. On a lot of times people get the you know be guaranteed. Returns mixed up with withdrawal rates. You know someone might say hey you know give me give me a lump of money and we're gonna give you 6% a year for the rest your life that sounds pretty good. But the reality is first of all in not saying it's 6% 5% you know it's different and every case sure. But in many cases it's most of that. You don't amount that they're giving you was just returning your money to eat. So it's not a return it's it's an if you actually calculate what the actual return his implied. To very low number and in most cases that we've seen in this and to certain environment a lot of people are better off in you know transparent. On liquid portfolios where they you know are gonna be locked in the high fees and limited investment choices they really have a lot of options. Armand and if you're considering any of these are you recently purchased one or you've had one you don't know what to do with that. Com CS that's part of our analysis that will do for you. You know we'll take a look at what you have will take a look at down you are you using these assets the most efficient in the most efficient way. I'm Goldman came out with another article this week that I thought was pretty good about pass location and when I mean by that is you know you might have taxable brokerage account. And diarrhea cal Roth account for a one K account. And your asset allocation might be a certain you know say 7520. Were 6040. That might be your target. But it doesn't mean that each one of you work counts should have that same asset allocation some of your accounts are better suited for stocks. So larger accounts are better suited for mutual funds some of them are better suited for municipal bonds. And just based on your tax rate based on on you know keep the tax efficiency of the assets that your own and you know it it does make sense to to really on pick and choose wisely. Ass location which accounts hold which investments. Armin and in might not sound like a big deal. But over the course of you know a decade. When you consider the tax yet to pay a certain investments it really makes a big difference if you do it efficiently and we can help with that as well. So and is scheduled appointment to see it was Alex and Paul once again the number eighty 897275268. KB 972 planned or go online deploy Armstrong dot com and just shoot them an email Lugar revert to self employment. And Paul will be back on Monday from his brief trip to Florida going smell and to be episode of that appointment once a year and EDD 89727526. Are now exposed before the break we're talking about what the Fed did it is last week in the importance of its so let's do a little deeper dive into that right now. Tom what does it mean for this bumps it did the market expected and what we might we see the future. The market anticipated that but. I think it at this point they were really more looking at what the Fed had to say about the path of future rate increases aren't on because there was a ninety plus percent expectation that they were gonna raise. And they did. They raised by 25 basis points or point 25%. To a target level of point 7521. Best I can impact many people run out you have an adjustable rate mortgage. Maybe they'll be taking up in the next say sixty days that will impact you. You know might impact your credit card. Interest rate of import but not a lot of people have floating rate. You know it's not gonna really impact your rate of savings at at the bank they're very sticky. They don't wanna raise any money they're paying you for their their deposits aren't you know and and it's a moderator it's not a must not much of an increase anyways so that the real impact that this has for people is on the longer term. Interest rate on you mortgage rates you know what reader their bonds getting that there are invested in their portfolio. And even though the Fed raised short term rates by 25 basis points longer term rates actually teamed down that's very toner tutored disarm. But the reality is the more than the market was pricing and more aggressive fed tightening move on then what they actually came out and said and yellen said that. They're still on track for their three rate increases for 2017. On the Carty had the one this week which means that leads to left in their projections for the rest of the year and a lot of people come to expect that number growing to four for the year. So the fact that the only likely to do three vs the somewhat. Growing expectation of four. Meant that before was before hikes was built into the ten year treasury bonds then now there there are peaking 33 and which is why the rate came down some ride. On and they also kept their 2018. Ready height outlook unchanged at three hikes in 2018. And they kept their inflation expectation lower a lot of people were were worried that you know with with wage inflation and the potential for. On some policies from this administration we might see it aren't as sharp rise in inflation. You know they didn't seem to be fazed by it yet. On Andy really didn't change that that target in when inflation gets high is when you really start to worry about what the feds that they don't wanna see high inflation. On the wanna see moderate inflationary don't want to see high inflation because that means things are overheating. I'm sort there was this this sense that the Fed was worried that things were overheating. Then he might have been more aggressive in their rate hikes but. Essentially what they said was they're comfortable with where they are they're comfortable with their their paths on and that the people who were fearing higher rates and higher inflation. Don't have as much to worry about so the market really rallied but interest rates came down because. My mom so. Financials which generally are gonna be the biggest beneficiaries of a rate hike. Actually lost ground on day and the more conservative. You know interest rate sensitive stocks like utilities actually saw Bob. I'm because they were discounting higher interest rates and the rates are actually projected to be slightly lower. So it's funny how that works on the you know don't CO fed hiking rates rates are going up. It doesn't have an impact on many people and it it really is noble one long term bonds due. As a result of the Fed rate increase and what it's stocks. I think overall it was a good sign it was a good sign that they they hiked the normalizing policy and the stock market's not freaking out. Price is I think I've said impulse set in recent shows that. A lot of people were saying no you know the only reason the stock market's up is because the Fed has been easing printing money and keeping interest rates low. We'll see nice to see when they're going the other direction. That's. The stock markets stable bond markets relatively stable. So which do we look towards June September. Yeah I mean that it's it's likely that you're gonna see another one you know when that time from June July time for him. But you know again it doesn't necessarily mean you to run for the for the hills and that you know you have to. Worry about interest rates going to too far too fast I think a lot of the jump we saw has already occur and since since fumbles it's gone from. Beat the number was 18019. All the way up to a 2.5 pars so we've seen a lot of the move. On and I think. It's it's not as the years not as much risk for rates to rise as people are are worried about their own port. Alex you you just mentioned again president trump and since trumpet and elected we have seen a lot of changes but we also know that it knows his election was part of our worldwide. Change we have been senior with a -- exit with his election and then. With other subsequent elections in Europe so we're going to talk about reelection in the Netherlands. Palm didn't quite turn out the way some folks had talked about but still interest staying nonetheless who'll address that my arm the last time like I say this this pay this much attention to write a Dutch election ferret out for exactly probably never. So this does that it what it means for investors here in the states swimmer turn its plants are financial for this just. Paul Parsons president of planned strong investment management. And you're listening to them plans strong financial forum on WRKO. Boston's talk station. If you like what you hear on our show and what need to take a look at your investments and retirement plan called my office of 80889727526. That's 888972. Plan. Securities and investment advisory services offered through metro metro group member to go as I can see classroom investment management is an affiliate business financial group think is located in Washington street domestically and six. Hi this is on he Nelson. If you're fifty or older here's a suggestion. Commit to getting your financial house in order over the years you worked hard took chances made sacrifices. And built up as much wealth as possible so you'd never run out of money in retirement. Well now. Now it's time to get organized and to make sure you have a financial plan will protect your retirement. If your financial life together. Paul Paul Parsons at planned strong investment management. A schedule financial checkup call 8889727526. That's 888972. Plan commit to getting your financial house in order. Call 888972. Plan or vision plans strong dot com. Securities and investment advisory services offered through next financial group pink member tumor SIPC plans to investment management does not include an accident and his OK I need to Washington beat them out. This says financial talk into your signing and informative. At least is informative its plans to own financial forum where bold portions president's bold plans stronger investment management oh. And I'm Jan Perry at the anchor desk and called Parsons is playing golf for Florida this weekend so joining us is Alex vendor CF bank Alex isn't analysts had planned stronger we're talking about what's been happening over the last week and in particular we've been addressed the interest rates bump in the last segment and now we're trying gloom about the election in the know Netherlands and as you mentioned Alex we probably never has to. Paid this much attention to it. A Netherlands election before but it was very interesting because we had some more populist movement and we may we weren't sure which river here we go for awhile. Yeah and the prime minister there on route. And forgive me if I'm mispronouncing his name and it's it's been around said differently on Fox Business San on CNBC so I just went with our combination there that's. But it. On if he called us the quarterfinal center against the populist movement that spreading throughout Europe you know we we saw Tom what happened with our with with Great Britain with the brings it. We saw what happened in the US with trump really you know continuation of that populous movement and now the Netherlands as having a similar had a similar vote this week. Where you know anti immigrant anti. And you you know you European Union candidate I'm geared. Was challenging the existing prime minister route. And it actually turned out to be a a loss for the populist movement. You know they still gain some seats and not in the parliament there. But overall it was seen as a win for the however took the more sent her right. I'm party with in the Netherlands and you know that unlike the US. There there on their legal system is is a bit different they're governing systems a bit different. They have legislative bodies that are that are based on proportional representation so if a party get 7% of the vote. Go get 7% of the seats and there's no majority at this point. The that the winning on the winning party. Controls I think somewhere along the line of 35 of the 150 seats and obviously they need 76 took to really form a coalition. So they will have to. You know form you know coalition with the with some of the other parties in order to have a ruling party. Second that can kind of rule you know at least half have a the overall majority say in in the government so. The that your movement did gain some seats and they're actually the second biggest party they're now. And the center left party actually lost. Almost 25 or thirty seats which was. You know pretty remarkable so it'll be interesting to see how the coalition is formed going forward so. You know this it it just because the populist. Essentially didn't get the win. Keira you know you might call a small win but overall they didn't get what they were hoping. It doesn't say that's how the other. Countries are gonna vote arm but the next big one that's coming up is in France in non you know in the the April may time frame home on hands. He's at the populist movement leader there is there is Marine Le Pen. And the thinking though is is even if she gets to rule and wins you the most seats. It's gonna be unlikely that that shall be able to form a ruling coalition. Just because a lot of the other parties don't wanna play nice so. You know even if the risk of her winning. Rises as it has recently and I think that though the market is still anticipating that. You know a lot of the policies that she's been proposing including you know getting out of the eurozone and and getting rid of the Euro currency. An and bringing that to a populist vote. Would not necessarily implement. It does seem though that every year a few months or so Alex we're. We're hearing about another election like this we're in the European Union is being threatened and we are Britain Italy we have a commitment Franz said the Netherlands and Austria so. Are we just going to keep threatening European Union and if so does that in and of itself weakened the union. There's there's just been so many negative outlook had headlines starting with the pigs you don't the Portugal's you give police decreases the Spain's com. How there is really more of a banking crisis and it required the entire. I'm eurozone to really build a male. In the form of you know lower lower yielding bonds and and and even you know monetary monetary stimulus from the you know from the EU. And this one is really more about are we better off with the EU are we better off with the eurozone currency and the feeling across the eurozone and some of it is anti immigration. They don't wanna continue to bring all these refugees that some of them are. You know dangerous and in in their minds and some of them are really. Bankrupting this country and mass that's what the bit that the spread is really around the eurozone. And it's causing I'm a lot of people rethink their membership in whether they want to maintain you know some of some of the countries like don't Germany are. Significantly better off under the Euro currency under the U. But others like Italy. Are are still suffering. And and the question is do we do we need to. You start over with our own you know hopefully we can we can negotiate retreat still. Going forward but. You know not necessarily wish with the faceless bureaucrat. You know making a lot of these big decisions for us including but not being able to control our own monetary policy so right. I think at this point a lot of people have avoided it because of this string of of negative news starting with you know the pigs in the banking crisis if you eat you know several years ago on 2011. On that hasn't really necessarily been result it's just not on the the the front burner anymore and now it's being shifted to these elections which. On you know even if they go the wrong way it's still unlikely that it's gonna completely unravel the system but it is a risk and it there's a couple of big outcomes if it goes one way things could go well goes the other way things could could really go poorly. And so I think investors' overall it really avoided the area because of an increased risk and 'cause of the fact that. You know they haven't really seen much in the way of of stock market returns or earnings growth in the last several years with the US market has seen all of so that I think an and we talked about it this week you know because of that vote. Europe was action European stocks are global stocks were up close to 2% on the on the compared to US stocks were up in a less than half a percent. And the thinking is it what point to sentiment shift ended his money start to flow win because it no one's invested there and it everybody's overweight US. Well what happens if they say oh you know there is some real potential there one a we divert some of our funds from the US to international allocation. That might support those stock prices going forward so. It's really a balance between you know who's willing to take the risk of of two various outcomes. On four potential recurrence and I think you know more more. Wrist own investors might consider that as an opportunity. But at the same time they'd rather invest in what they know when and what seems to be on on more solid footing. Economic footing and political footing at least going forward it's hard to say the US is is this more solid on a political footing given given everything we've been. Seeing on the news and reading in the papers with with. You know the new health care bill. The new budget which you know it it seems completely unlikely that most of apple will ever get through. But the fact that you know Europe's and even more dire political shape is this what's folks. Focused investors' attention on the US over those economists. So next month we have the preliminary election in France and a bullet we'll see what happens there are young yet that you're you're gonna be hearing a lot more about these elections in the coming months and then and then so that the France election is is really considered the semifinals and then the German election in its September is considered finals. You know Germany is really the the bit ended voice of the EU the strongest member nation. And you know with the strongest support for the currency but. Based on some unfortunate events their people are really starting to. Wonder about the you know the whole open border thing and and that's caused some of the other parties to really gain traction so that we that if if if that continues and that and that direction. You can see big change in relief that the leadership of the of the euro's. So back to the states or Alex we had some economic data released just this past week what what are we learning anything any good news bad news. It continues to look pretty good from an economic front on most of the data that came out this week continued to point two words you know it's a reasonable recovery if not accelerating recovery. I'm jobless claims remained at multiyear lows on you know the number was was. Oh a little bit down from last week 240000. New new one and I'm unemployment insurance claims. The US housing market is is continuing to two it to remain strong arm high demand and constrained inventory are pushing up prices. Amen and people are worried about higher mortgage rates and there's been some some demand just to kind of get in and and get that that that loaned for the rent you know rate goes up so there's a little bit of that factor that's that's driving the success there of course historically were still very low rates yum yep absolutely. Absolutely murdered and her rates are higher you know there are those banks might be more willing to land which which opens up capital and then council process well. Philly Fed index which is a measure of business conditions in the Philadelphia region. Tom deteriorated slightly this month from last month last month was a thirty year high source things to look pretty strong there the number was still better than expectations. And then internationally you know we talked about the US debt but you know we also have monetary authorities in other on other developed nations are you know other nations not just developed. On the Bank of England's Tom left their monetary policy unchanged and their. Continuing there. Quantitative easing program which which you should be very familiar with here in the united roots. On their buying. You know 533 billion dollars worth of club of bonds and popping that really into the system to keep rates slow. They actually young were little bit more hawkish. As opposed to de mission by hawkish I mean a little bit on the we might be loosening up our. Stance that Reid should remain a slow and we should continue to pump this much money into the system that they see things pretty strong. And if things continue on this path. On the might be withdrawing some of their monetary easing support interest and that was ordering their stirring in the face of Rex yeah and then you know despite the breaks that there's still a lot of uncertainty as to what it's gonna mean to their their trade with the with the rest the world with their currency. On us and the most important either trade with the Euro zone around and their travel in and work these is hopeful but overall it was. Someone encouraging to see them. You know at least hinting at and pulling back on the reins that things are strong enough over there. Even with all of this this uncertainty that they've they might not need to be quite as supportive. And we do enemy and we did see our president trump refused new budget proposal yep you know I'm sure that was it was covered just about everywhere I'm not gonna spend too much time on that. And it's not gonna be close to what he's proposing but really the idea Darius is he's he's really hoping to boost. Defense spending on in certain infrastructure spending and if that goes through there might be some companies and industries that that stand to benefit. I'm again the question is how much that's priced in but they're they're still are some new opportunities if if things to do play out the way that that his administration's hope. Alex we come back grew into it's a new stories and investment ideas including the rise of robots when we return to supply a strong financial form this is. All Parsons president of planned strong investment management. And you're listening to the plan strong financial forum on WRKO. Boston's talk station. If you like what you hear on our show and what they need to take a look at your investments and retirement plan called my office at 80889727526. That's 888972. Plan. Securities and investment advisory services offered through metro metro group member to go as I can see Clinton mismanagement and filling in this country grouping that is located in Washington street domestic and six. Hi this is Avi Nelson. People use different strategies to acquire enough money for retirement some try to do it themselves. Others buy insurance for investment products though sometimes those benefit the seller more than the buyer what makes sense is to hire an advisor with first rate credentials and why do investment management experience. Should have a fiduciary obligation to act in your best interest. And be paid the same amount no matter watcher invested in if these things matter to you. Call Paul Parsons at planned strong investment management to learn more. Call 8889727526. Hiring the right advisor could be your best investment. That's 888972. Plan or vision plan strong dot com. Securities and investment advisory services offered through next financial grouping member former SIPC plans to investment management is not an affiliate of next financial grouping and is located at 980 Washington street Dedham mass. I'm Leo really your show is not trying to sell you insurance or movies. This musical plans strong partnership for a quick poll portions president told plans strong investment. Can curry at the anchor desk him with speed is not called Parsons to Nepal is enjoying the sun in Florida playing a little golf and he's picked a good week to do that to avoid some of this cold weather and perhaps more snow. And so you know Paul Paul does pick the days just about right there with the today's expander Alex this is CFA and he's an analyst at play a strong woman. Talking about what's been going on over the last week ended it seems like it's a buffalo has been going on it was a good week to do the show could only talk about plenty is right and you do have some some news stories that are our ventures to our investors including one about robots yes so. I wouldn't say news stories I would say. Very targeted investment articles or drank some of the norm barren some from other sources. And this is this one's actually. Been very interesting to me and it's been it was a cover of Barron's a few weeks ago and polls had the opportunity to discuss that on each of the last couple shows and he didn't some of steel and he's given America's he likes gadgets and our debt and Lewis you're so I also have to others I wanna talk about if if we have time and one of them is health care. And then the last is an interview inner interest in an interview from mom from from bill Ford. About the future of the year the autumn automobile market. And down my found that pretty interesting as well so Obama rather than covering each of them in length in my cover kind of tidbits from Bermuda and may be if if we don't get to something we'll have Paula. Carry over to the next show OK but on on the robots this is this has always been pretty interesting and and we haven't seen a lot of adoption. Of these sorts robots I mean yummy meat every now and then you go on YouTube and you and you see that the coolest gadget that's out there really in the US it's it's been. Armed robots within the auto manufacturers. You know pretty pretty. Well received and that industry. Com and you see the vacuuming robots the gutter cleaning grunts and things like that right but nothing really too major. The real adoption has actually been in China. Arm where they're actually they're not just using robots to. Bring cost down there doing it to really improved products and they also are facing a big demographic headwind. Of following working age population and under projecting to lose about a million workers per year city need robots to help fill that gap. They've they've noticed in certain industries that they've you know largely been mean and mean you know auto automobiles they have mid competitive but the rest the world. Because the cars frankly just aren't good and they need machines to be able to do certain. Aspects of the of the manufacturing. Side of the of the auto side. And down you know that the adoptions really growing quickly there but trump is actually in some of his proposed policies. Are potentially going to be increasing the adoption here in the United States for industrial robots. And the reason is if if you're. If you're being penalized for manufacturing outside the United States. On and if you're being incentivized to do more at home with a through taxes or through. You know. Exports being less. No more tax efficient and imports. Then you're gonna start seeing more robots. And that's not necessarily a terrible thing for jobs because you know as there's a lot of the industry people put it. You know just because a certain methodology of of the manufacturing something. Meat may have the most workers doesn't necessarily mean it's a sustainable weight to it to stay relevant and sometimes you need to adapt just to survive. And it's important for these industries to survive the important for the United States and they're still will be workers even in the wake of robots. On they'll be more working alongside have you. These days robots are really more in separate rooms you know lifting heavy things and they're nuts they're not seek to be around. But a lot of companies are starting to introduce robots are actually working side by side with humans. Armon that's really that the type robot that I'm talking about now can these be very cost effective do you see a lot of money with the robot he has so. You know 11 person and and you know it's it's not really an independent source stated they are in the robotics industry but they they estimate that you know typical 250000 dollar installation including training and parts. Arm can pay for itself in about two years on and that once up in well placed. These these these robots who cost anywhere from fifty cents tote one dollar per hour operate. Which is a far cry from the sorts of hourly. Wages and and benefits that you see today. The the this thinking there is that over a course and you know 78 years. You can see you move to cash flow and and and you know one to two million dollar range for a lot of these companies obviously it's going to be incredibly interest in four. I'm these companies especially if there are some tax cuts. That allow these companies to invest and actually right off the deduction. Over shorter period time. Vs having to do it over you know a depreciation methodology over many years so. There could be some benefits arm and tax incentives for companies to really start to turn to invest in the space. And something to keep an eye out on. Armed. And I think it's gonna become a bigger part of everyday life as software and I'm chips and you know machinery improves com and and you have more commercial applications for the stuff but it's certainly worth keeping an eye out for. In terms of ways to invest in this speed or your interest in depth on I mean there are some some individual stocks that you can buy a lot of them are frankly in Asia Asia got a big head start on industrial robotics vs the US. It's hard to invest in some of those international names because they don't trade on the US exchanges. In some cases you can get him through an ETF. I'm there's a there is a robotics ETF but it wouldn't necessarily recommend. Certainly not for risk averse investors. Might might issue with that is it is is it's about seven eerily different companies. Not all of them are really pure play in robot so you're not really buying robotics are buying that particular ET the same time. You know they don't really overweight to order were. Have enough of of a week in the the bigger companies it's it's really more of of equally weighted index own you know that the leaders in the space don't get more attention and the ones who just have you know one small division. I'm in in the robotics industry so. There are couple of fund US companies. A lot of big companies that have divisions are in the space on. One of which is is Kubel who actually has a robot division Boston dynamics very small. But I do encourage you to look look on YouTube at Boston dynamics latest. A robot a few years ago they introduced a robot dog that can load the dishwasher from him and now they're introducing one that actually. This column you know stands operate. Can can pretty much already terrain can lift things can jump. And that's why actual guard can do very exactly exactly. The fishing in jumper and it cared what a load the dishwasher she's there robot doesn't take an RS. To. Arson so there are some companies who you know Stosur interest in the concluding that can do gathers Rockwell Automation which is kind of I'd say as US companies go they're the most aligned to the industry. There really more on the software side verses the you know the robotic manufacturing side is certainly worth keeping an eye out on a lot of these companies are are pretty expensive on and you know dvds and other one which hasn't a US ADR that Iran is involved in the space of automation and robotics and the problem is they they also have a division and and how portraits that's been losing share in instant suffering so even though one divisions on while the other divisions really offset it and it's actually underperform Kris stashed Leo the last yours so. All worth keeping an eye on Tom always to get some exposure to space and if you wanna talk more specifics you know what's what company specifically we we recommend for you if at all. I'm in what proportion your portfolio would be happy to talk about off. In Cuba Alex a call to discuss robots EDD 89727526888972. Planned. Or going under plans strong dot com and just send them an email that would be good time to set up an obligation portfolio review as well we've. Alex and Paula plaster. So I I didn't wanna spend a little bit on health care there was a good article in Barron's and I pieced it together with a couple of other pieces from mom from Merrill Lynch wealth management. So after years about performance on you know 2012 really threw twenty mid 20s15. Health care stocks Corey we underperformed last year. And you saw a lot of money leading leaving beat the industry and investors are pretty well known for coming leap to the party and leaving. On early. And that's exactly what's happened here is you had a record outflows. Of of health care mutual funds last year. And that continued in January. Yet since beginning of the year health care stocks have just just about double piece of US stocks on and frankly. On the other it there are a lot of reasons to be optimistic for going forward there are a lot of headline risks it's it's. You know front and center with the with the whole you know obamacare in the potential replacement what's second and due to. You know drug companies drug prices it's clearly a concern but the only thing that's changed fundamentally has been valuations. Earnings have continued to be amongst the strongest in the come in the market. Arm and you know frankly if you if you look at. On the aging demographic not just here in the United States but around the world. The expanding middle class in the emerging markets that are spending much more on health care there's a real tail wind for circuses and there's a lot to be optimistic. Despite some near term headline risks and I do think that it's worth a look. And in terms of how much you have in your portfolio you know it it it should it depends on how much different stocks almost you haven't bonds bought. We are certainly market wage if not slightly overweight health care. Arm as we see evaluations forty year lows and a lot of a lot of things to be excited about on the horizon. Including if I could just name a few and this is switching over the Merrill Lynch research. On terrorists genetic sequencing which I know we've we've talked about your before but it's really personalized DNA on your you're able to understand you were. On your BP your genetic make up and actually treat inherited diseases before you even start seeing symptoms mean obviously early detection is key there. Come at the same time there's there's also care bots Tom which are we have robots that are being used a lot Japan right now. And that's incredibly important because there's going to be a shortage of health care workers here in the United States and it be nice to have some. Robot and robots that are able to help with you know distributing medicine helping people in and out of bed and so forth and and that could be a big growth markets here in the states. On there's also computerized prosthetics which is on that you know there was reporting 2015 there was a robotic arm that could be. I'm controlled by human brain actually had a sense of touch as well so it's amazing some of the yum. The innovations that are happening in this health care technology space. Last but not least just a couple of other. You know technologies that are currently in development their contact lenses that measure glucose levels for diabetics. There are pills that travels through the body and identify cancer cells are signs of immediate heart attack. On there Smartphone apps were they collecting it and they send your health care provider. And there's actually you know most interestingly and hard to believe they're 3-D printing. Three deep printed replacement body parts really organs and bones and tendons and it's just unbelievable what's going on or not saying these are all huge jerk. You know were were anywhere near. Commercial development but it's just an idea of some of the exciting things going on in Anna in a pretty exciting industry. A lot going on if you have any questions you'd like to talk to Alex and Paul both some of these investment ideas you give him a call to all 380 972752680. 972. Plan or go online to plastering dot com Alex thanks for filling in today for pinch hitting. And now we'll see you next time politics or break it supply and strong financial form. This is all Parsons president of planned strong investment management. And you're listening to them plans strong financial forum on WRKO. Boston's talk stations. If you like what you hear on our show and what media take a look at your investments and retirement plan called my office at 80889727526. That's 888972. Plan. Securities and investment advisory services offered through metro metro group member finger as I can see Clinton mismanagement and billions of mismanagement grouping that is located in Washington street domestic. And six and strong investment management is located 980 Washington street Dedham mass 02026. And can be reached at eighty to 89727526. Political views may not reflect the views or opinions of next financial group the securities and investment advisory services offered through next financial group ranked number fender SIPC plaster investment management has not affiliate in its financial -- think this radio show is for informational purposes only and is not a solicitation recommendation that any particular investor should purchase or sell any particular security information contained herein is obtained from sources believed to be reliable but its accuracy and completeness or not guaranteed neater next financial groupings nor represented of provides talked about.
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