WEBVTT - Loreen Gilbert on the Markets (Radio)

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<v Speaker 1>Let's get to our guest, Loreen Gilbert's CEO of Wealthwise Financial. Well,

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<v Speaker 1>it's a complex marketplace out there. We've had this huge

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<v Speaker 1>drop in the stock market and then the bond market,

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<v Speaker 1>and people are looking for bottoms. It seems like you're

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<v Speaker 1>attracted here to high quality investment grade bonds. And so

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<v Speaker 1>if we if we look into credit like this UH

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<v Speaker 1>and into some of the ways of getting exposure, the

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<v Speaker 1>e t F l q D is one we can

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<v Speaker 1>focus on. It's dropped from just over one thirty to

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<v Speaker 1>just over one. So if you buy this now, you've

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<v Speaker 1>already taken I mean, we've had a lot of pain there.

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<v Speaker 1>You're now expecting that that will have yields coming down

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<v Speaker 1>sometime soon. Lorie, Well, I think when you look at

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<v Speaker 1>the bond market in general, there's going to be a

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<v Speaker 1>reversion to the to the mean, and so right now

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<v Speaker 1>there is an opportunity in fixed income. And what I

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<v Speaker 1>would say the opportunity is to start with quality you know, treasuries,

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<v Speaker 1>and then go down the credit chain there and be

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<v Speaker 1>being more careful keeping it on the quality side, because

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<v Speaker 1>as the economy deteriorates, if we continue to see a

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<v Speaker 1>deterioration of the economy. You know, right now, still economic

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<v Speaker 1>numbers are good. But if we start to see a deterioration,

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<v Speaker 1>then of course we know that the areas of the

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<v Speaker 1>credit will be affected more than your in your quality

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<v Speaker 1>side of things. But we do see in a sense

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<v Speaker 1>decade long opportunities in fixed income for people who are

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<v Speaker 1>looking to add cash and want to keep it conservative. Well, absolutely,

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<v Speaker 1>and you look at this, and you look at two

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<v Speaker 1>year yields at four point many four point three, I

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<v Speaker 1>mean that represent value surely and also safety, right and

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<v Speaker 1>I think that you know, for a lot of people

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<v Speaker 1>looking to deploy cash right now are looking and saying,

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<v Speaker 1>you know, as we're heading close search to a recession,

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<v Speaker 1>then farther away from it, where do we put our resources?

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<v Speaker 1>And my answer to that would be to stick with

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<v Speaker 1>value oriented equities that are divid in paying stocks. And

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<v Speaker 1>then looking at the fixed income opportunity where we've seen

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<v Speaker 1>such a draw down. Do you like a mix of

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<v Speaker 1>because you talked about a mix of fixed income, you know,

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<v Speaker 1>including sovereigns and credit, Uh, what about muni's? Do munies

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<v Speaker 1>look pretty good here, particularly given the tax free nature. Absolutely,

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<v Speaker 1>I mean municipal bonds have been hit UH incredibly hard

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<v Speaker 1>year to date. And yet when we look at UH,

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<v Speaker 1>the credit quality of these municipalities, their flush so around

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<v Speaker 1>the country, these are municipalities that are going to pay

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<v Speaker 1>their debts. So absolutely, municipalities are a great opportunity tax

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<v Speaker 1>nature as well. You know we've got this aggressive FED,

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<v Speaker 1>that we've got the possibility of a recession. Well, to

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<v Speaker 1>begin with, how indeed, what are the chances of a

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<v Speaker 1>recession this year and next? And secondly, how much pain

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<v Speaker 1>do you think the FED is willing to place on

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<v Speaker 1>the US economy? Well, the set is definitely talking tough,

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<v Speaker 1>and what they're doing is saying that they're going to

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<v Speaker 1>be tough going forward. And if you believe what they're saying,

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<v Speaker 1>then certainly it's going to be hard to hit a

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<v Speaker 1>soft landing. And they've stopped even talking about a soft landing,

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<v Speaker 1>which indicates they're willing to go to a hard landing.

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<v Speaker 1>So certainly that means a recession. And so the big

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<v Speaker 1>question is do we believe what the FED is saying

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<v Speaker 1>or in fact, are they going to talk tough and

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<v Speaker 1>hope that things somewhat slow down and inflation starts coming

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<v Speaker 1>down and then they can then pause. So you know,

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<v Speaker 1>I don't see a recession in two and and it's

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<v Speaker 1>it's very unlikely in two and even right now if

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<v Speaker 1>you look at what's kind of been priced in the

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<v Speaker 1>chance of a recession twelve months out. But having said that,

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<v Speaker 1>I think the likelihood of a recession in late is

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<v Speaker 1>very probable. So that makes it a difficult time really

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<v Speaker 1>to get aggressive and probably even to to do a

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<v Speaker 1>lot of buying in the equity markets. Um and and

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<v Speaker 1>particularly you started off with talking about investment grade corporate bonds. Uh,

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<v Speaker 1>is it likely that we're going to see a pretty

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<v Speaker 1>sharp revision down of earnings expectations over this next period.

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<v Speaker 1>I think we're already seeing that from analysts, and I

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<v Speaker 1>think we're going to continue to hear that. And the

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<v Speaker 1>question is do earnings just go off the cliff or

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<v Speaker 1>is it just you know, that you know, continuing to

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<v Speaker 1>slow down. I do think though, that it is an

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<v Speaker 1>opportune time to overtime time be purchasing in equity, So

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<v Speaker 1>we are seeing opportunities there. So we certainly do see

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<v Speaker 1>some opportunities that I think, um, you know, people could

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<v Speaker 1>take advantage of, but certainly on the more defensive, cautious way,

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<v Speaker 1>And I think for investors to be thinking about that,

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<v Speaker 1>their opportunities right now and taxable accounts would be to

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<v Speaker 1>take tax loss harvesting. And if in their retirement accounts

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<v Speaker 1>they're gonna they're gonna want to hold longer than doing

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<v Speaker 1>too much of selling because you're not going to get

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<v Speaker 1>any kind of tax advantage. There. Tell me something here

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<v Speaker 1>as well, when you if you took your views as

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<v Speaker 1>a month ago to what they are, how would they

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<v Speaker 1>have evolved. That's the first part of my question. And secondly,

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<v Speaker 1>do you think that the merchants have doomed for Europe

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<v Speaker 1>over egging it? Right? So we certainly have changed our stance,

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<v Speaker 1>and that is that's changed along with the Feds States.

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<v Speaker 1>You know, really Jackson Hole was a pivot and ever

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<v Speaker 1>since then, you know, to take them seriously as far

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<v Speaker 1>as what they're saying, UM would mean that we need

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<v Speaker 1>to be more concerned about this hard landing idea, and

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<v Speaker 1>so yes, I would say that we have pivoted as

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<v Speaker 1>well to being on the more cautious side preparing ourselves

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<v Speaker 1>for a potential recession. Having said that, I would also

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<v Speaker 1>say that not all recessions are created equally, and we

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<v Speaker 1>are not expecting a severe recession. And that's why I

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<v Speaker 1>say that even through this trough, we see opportunities that

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<v Speaker 1>I think people can take advantage of. And then to

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<v Speaker 1>your point about Europe, I do think somewhat it is

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<v Speaker 1>potentially over overdone. And although this nord Stream pipeline is

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<v Speaker 1>is another big issue and that's the latest news, but

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<v Speaker 1>without what we heard is that Italy is prepared for

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<v Speaker 1>the winter. And so you know, the question is, you

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<v Speaker 1>know how many countries are in fact they've been preparing.

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<v Speaker 1>Maybe they're more prepared than we think they are. Yeah,

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<v Speaker 1>but you've just outlined you've got a slowing US economy,

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<v Speaker 1>a slowing European economy, and a slowing Chinese economy. Well

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<v Speaker 1>that's a that's kind of I think we're out of time.

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<v Speaker 1>I don't think we can really go into this, but

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<v Speaker 1>you know, it paints a pretty nervous picture out there. Loreen,

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<v Speaker 1>thanks very much,