WEBVTT - Larry Rosenthal: Near Term Cautious, More Optimistic Q4 (Audio)

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<v Speaker 1>Global business news twenty four hours a day at Bloomberg

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<v Speaker 1>This is a Bloomberg Business Flash from Bloomberg World Headquarters.

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<v Speaker 1>I'm Charlie Pellett. We have got thirteen minutes to go

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<v Speaker 1>ahead of the close on a Tuesday, ahead of the

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<v Speaker 1>Fed decision tomorrow, and stocks are on track for their

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<v Speaker 1>longest losing streaks since February. Stops slipping for a fourth

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<v Speaker 1>day amid growing uncertainty about the UK's future in the

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<v Speaker 1>European Union. Right now, the SMP five hundred index down six,

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<v Speaker 1>dropping three tenths of one percent to two thousand seventy three.

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<v Speaker 1>Ness stacked down two tenths of one percent, down nine

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<v Speaker 1>points to thirty eight down, Industrials down seventy two, a

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<v Speaker 1>drop of four tenths of one percent. The tenure down

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<v Speaker 1>three thirty seconds, with the yield of one point six

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<v Speaker 1>two percent. Gold little changed up point one percent, now

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<v Speaker 1>advancing a dollar thirty to tweight eight. I'm Charlie Pellett,

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<v Speaker 1>and that's a Bloomberg Business Flash. Thank you, Charlie Pellett.

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<v Speaker 1>It is time now for the e t F Report.

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<v Speaker 1>It is brought to you by Van Eck Vectors e

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<v Speaker 1>t f s. Expect more from your muni's target tax

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<v Speaker 1>Muni van Eck access the opportunities. Let's go now to

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<v Speaker 1>Catherine Calgary for our et F report. Gold is up

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<v Speaker 1>twenty one percent so far this year and it's trading

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<v Speaker 1>at its highest in four weeks on growing uncertainty over

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<v Speaker 1>whether Britain will exit the European Union and caution ahead

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<v Speaker 1>of Central Bank meetings this week. The rally and gold

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<v Speaker 1>is reflected in interest in e t f s backed

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<v Speaker 1>by the precious metal. The biggest, the Spider Gold Shares

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<v Speaker 1>or g l D, has attracted nearly ten billion dollars

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<v Speaker 1>since this start of the year. In contrast, e t

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<v Speaker 1>s that focus on gold mining companies have attracted far less.

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<v Speaker 1>On eighty million dollars has flowed into the Van Eck

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<v Speaker 1>Vector's Gold Miners e t F so far this year.

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<v Speaker 1>Here's Joe Foster, a portfolio manager at the The stocks

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<v Speaker 1>are performing very well. I mean our fund is up

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<v Speaker 1>over this year, whereas the gold price is up somewhere

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<v Speaker 1>around so they're performing very well, but we're just not

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<v Speaker 1>saying the flows into the gold stocks. I think this

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<v Speaker 1>rally caught the market off guard, and I think I

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<v Speaker 1>think what investors are looking for is a pullback or

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<v Speaker 1>some sort of a consolidation before they step into these equities.

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<v Speaker 1>Foster is calling this a new bowl market for gold

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<v Speaker 1>that's in its early stages. That's your Bloomberg etf Force.

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<v Speaker 1>I'm Catherine Cowdery. You're listening to Taking Stock with Kathleen

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<v Speaker 1>Hayes and Pim Fox on Bloomberg Radio. Yes, stocks are

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<v Speaker 1>on track for their longest slide since February. And yes,

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<v Speaker 1>more and more government bond yields are heading below zero today.

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<v Speaker 1>The big news the German bund the tenure note going

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<v Speaker 1>to a negative rate. So what do you do if

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<v Speaker 1>you're managing more than a half billion dollars worth of

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<v Speaker 1>money for investors? Let's ask Larry Rosenthal. He's president of

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<v Speaker 1>Roseenthalt Wealth Management Group and he's joining us from Nassas,

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<v Speaker 1>Virginia today. Larry, welcome, Thank you for having me. How

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<v Speaker 1>are you today? Just great? Uh, You've been in the

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<v Speaker 1>business for a long time. Did you ever think you'd

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<v Speaker 1>see a day when eleven trillion dollars worth of government

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<v Speaker 1>bonds around the world had negative yields. Definitely not UM.

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<v Speaker 1>But that's sort of what's going on now, and it's

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<v Speaker 1>all a movement to create stimulus and economic UH, you

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<v Speaker 1>know movement the velocity of money UM. Savers are going

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<v Speaker 1>to continue to be punished and risk takers are going

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<v Speaker 1>to continue to be rewarded with volatility. But if the

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<v Speaker 1>banks aren't offering any incentive to park your money there

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<v Speaker 1>or government bonds to park your money there, then you're

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<v Speaker 1>gonna have to employ the dollars elsewhere, laury money. If

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<v Speaker 1>you could talk a little bit about employing those dollars elsewhere.

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<v Speaker 1>Do you find that investors are pile into just a

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<v Speaker 1>few names when it comes to stocks UM, your your yes,

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<v Speaker 1>I think your your household names are getting the majority

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<v Speaker 1>of that UH, And I do like different sectors UM

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<v Speaker 1>from a from a short term perspective and a long

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<v Speaker 1>term perspective. Let's take a look at the long term

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<v Speaker 1>perspective first. For the long term standpoint, I like UH

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<v Speaker 1>some some dividend payers, large cap UH stocks with good

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<v Speaker 1>balance sheets in this environment, as well as the sectors

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<v Speaker 1>of biotech and technology going forward. Short term, I'd be

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<v Speaker 1>cautious a little bit with your less popular names and

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<v Speaker 1>names that have had lots of run up recently. Um,

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<v Speaker 1>you know, the market is seeming is seeming to stall

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<v Speaker 1>a little bit, especially ahead of the Brexit conversation as

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<v Speaker 1>well as the FED meetings UH this week. So little

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<v Speaker 1>caution short term, but I think in the long term

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<v Speaker 1>we're gonna be okay and push through this a little bit,

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<v Speaker 1>provide the investors have the appropriate balanced portfolio that they

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<v Speaker 1>need to accomplish their objectives and goals. And that's where

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<v Speaker 1>some people get confused sometimes, is is looking at a

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<v Speaker 1>short term investment versus you know, like a trade versus

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<v Speaker 1>really investing to produce income for themselves in retirement or

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<v Speaker 1>college funding or the case may be there. Yeah, and

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<v Speaker 1>this is very short term in terms of these big

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<v Speaker 1>picture questions. The FED meeting starts today, we get the

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<v Speaker 1>decision tomorrow, breggsit vote June. We'll see even if they

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<v Speaker 1>leave the you know, we'll see the volatility. We'll see

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<v Speaker 1>what happens. You just mentioned though, for example, technology for

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<v Speaker 1>the long term, can you give us if you can't

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<v Speaker 1>give us a specific name that you are owning or recommending, Uh,

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<v Speaker 1>could you give us an example of the kind of

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<v Speaker 1>tech company you're talking about, because there's you know, if

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<v Speaker 1>chip makers are tech, then Intel is very different from Microsoft,

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<v Speaker 1>is pretty different from Facebook, I would agree. And when

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<v Speaker 1>I talk tech, the first thing I think of is

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<v Speaker 1>how certain technology companies are changing the way you and

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<v Speaker 1>I as individuals and businesses send and receive information. Uh,

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<v Speaker 1>not only domestically, but as well as around the world.

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<v Speaker 1>And the access to data, the efficiency of data is

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<v Speaker 1>the areas that I'm really really talking about. We we like, uh,

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<v Speaker 1>the E T F space there to buy the whole

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<v Speaker 1>basket versus individual companies. We just think it's a rising

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<v Speaker 1>tide that's going to continue for several years down the

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<v Speaker 1>road as people continue to increase their technology. I mean,

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<v Speaker 1>just think about this. Just just imagine ten fifteen years

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<v Speaker 1>ago going to a car dealership today and back then

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<v Speaker 1>and buying a car that's that comes pre fitted with WiFi.

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<v Speaker 1>Back then, we would have never understood that at all.

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<v Speaker 1>But yet now that's happening, and it's going to continue

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<v Speaker 1>to happen. Technology is going to continue to change the

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<v Speaker 1>way we send and receive information. That's going to help

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<v Speaker 1>businesses out it's going to help people out in the

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<v Speaker 1>healthcare sector as well, so it's gonna be well rounded.

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<v Speaker 1>I just want to pick up on something having to

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<v Speaker 1>do with healthcare because at the end of the Affordable

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<v Speaker 1>Care Acts third open enrollment period, total enrollment was about

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<v Speaker 1>twelve point seven million individuals. This shows that enrollments are

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<v Speaker 1>falling in each successive period. Does that affect your call

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<v Speaker 1>on healthcare stocks? Not really, UM, the Affordable Care Act

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<v Speaker 1>is basically designed to get people ensured, get them into

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<v Speaker 1>the program. That's one scenario there that's different than what

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<v Speaker 1>I'm talking about. I'm talking about biotech, UM, advanced pharmaceuticals,

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<v Speaker 1>Alzheimer's research, cancer, hip replacement, knee replacement. That space is

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<v Speaker 1>designed to improve quality of life and extend quality of life.

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<v Speaker 1>So we're very specific when we go into the healthcare

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<v Speaker 1>space using some ets like that. I'd like to come

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<v Speaker 1>back to technology et s. Are you saying, then, if

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<v Speaker 1>you're looking at how information is transferred? Are you looking

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<v Speaker 1>at ets that hold uh cloud? Uh? You know, enterprise

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<v Speaker 1>kind of service companies? Uh? What kind? Could you just

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<v Speaker 1>be a little more specific there? Again, tech is pretty broad.

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<v Speaker 1>Would you do something more more specialized or are you

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<v Speaker 1>just saying buy something it owns, you know, lots and

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<v Speaker 1>lots of different kinds of technology companies. Well that's a

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<v Speaker 1>great question. Let me give you the answer from a

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<v Speaker 1>financial planning perspective, if I may. We work with clients

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<v Speaker 1>that are close to are already retired, so we're building

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<v Speaker 1>and designing portfolios to accomplish their objectives at this point

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<v Speaker 1>in life and down the road. So if we're if

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<v Speaker 1>we're liking the tech space, we may put them into

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<v Speaker 1>an e t F that buys the basket of technology. However,

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<v Speaker 1>from on a case by case basis, we may then

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<v Speaker 1>go find a name if the stock looks to be

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<v Speaker 1>an appropriate buy at the particular time. But we just

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<v Speaker 1>like the entire space, along with the biotech space. Long term,

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<v Speaker 1>viewing it from the rising tide is going to lift

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<v Speaker 1>the whole all the boats in the harbor. All right.

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<v Speaker 1>I noticed that you've been speaking about exchange traded funds.

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<v Speaker 1>Do you specialize justin exchange traded funds or would you

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<v Speaker 1>be willing to put money to work in individual stocks?

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<v Speaker 1>We do both. We have active and passive mutual funds

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<v Speaker 1>as well as ets and individual stocks inside of our

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<v Speaker 1>portfolios for our clients depending on what their objectives are

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<v Speaker 1>and what we see in the marketplace. You know, it's

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<v Speaker 1>it's pretty easy to to uh buy some SMP five

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<v Speaker 1>stocks and e t F passive investment like that, uh

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<v Speaker 1>in the SMP five space. But when you start looking

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<v Speaker 1>abroad at uh uh intermatt International emerging small company growth

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<v Speaker 1>stocks there, you might want to employee active management in

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<v Speaker 1>a mutual fund versus something that's passive. So the further

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<v Speaker 1>away it is from the center of the dartboard, the

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<v Speaker 1>more we would lean towards active management. How about income,

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<v Speaker 1>If the ball market is kind of crazy right now,

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<v Speaker 1>how do you get income dive it mpairs it is,

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<v Speaker 1>I mean, we we look at it a few different ways.

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<v Speaker 1>UM dividend payers. We also like the middle of the

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<v Speaker 1>curve as far as the bond market goes right now,

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<v Speaker 1>UM publicly traded reats if you can put in some

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<v Speaker 1>trailing stop losses just to limit volatility, and they're yielding

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<v Speaker 1>very attractive numbers as well, So we do sort of

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<v Speaker 1>a mixture between the two or three. They're depending on

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<v Speaker 1>the client's objectives as well. So you know, we are

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<v Speaker 1>definitely in a yield starved environment, so we need to

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<v Speaker 1>find quality bonds when it comes to that, and a

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<v Speaker 1>lot of bond ladders are being you know employed now

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<v Speaker 1>in the investment world. Uh, you know, as far as

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<v Speaker 1>all that goes for people. Thank you very much for

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<v Speaker 1>spending time with us. Larry Rosenthal is the president of

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<v Speaker 1>Rosenthal Wealth Management Group, helping to manage more than six

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<v Speaker 1>hundred million dollars of client assets. Speaking bullish about healthcare,

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<v Speaker 1>specifically biotech as well as technology stocks, We're going to

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<v Speaker 1>take you through to the clothes next right here on

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<v Speaker 1>taking stock. I'm pim Fox, my co host Kathleen Hayes,

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<v Speaker 1>and this is Bloomberg Radio. Yeah,