Speaker 1: Let's get to our guest, Loreen Gilbert's CEO of Wealthwise Financial. Well,
Speaker 1: it's a complex marketplace out there. We've had this huge
Speaker 1: drop in the stock market and then the bond market,
Speaker 1: and people are looking for bottoms. It seems like you're
Speaker 1: attracted here to high quality investment grade bonds. And so
Speaker 1: if we if we look into credit like this UH
Speaker 1: and into some of the ways of getting exposure, the
Speaker 1: e t F l q D is one we can
Speaker 1: focus on. It's dropped from just over one thirty to
Speaker 1: just over one. So if you buy this now, you've
Speaker 1: already taken I mean, we've had a lot of pain there.
Speaker 1: You're now expecting that that will have yields coming down
Speaker 1: sometime soon. Lorie, Well, I think when you look at
Speaker 1: the bond market in general, there's going to be a
Speaker 1: reversion to the to the mean, and so right now
Speaker 1: there is an opportunity in fixed income. And what I
Speaker 1: would say the opportunity is to start with quality you know, treasuries,
Speaker 1: and then go down the credit chain there and be
Speaker 1: being more careful keeping it on the quality side, because
Speaker 1: as the economy deteriorates, if we continue to see a
Speaker 1: deterioration of the economy. You know, right now, still economic
Speaker 1: numbers are good. But if we start to see a deterioration,
Speaker 1: then of course we know that the areas of the
Speaker 1: credit will be affected more than your in your quality
Speaker 1: side of things. But we do see in a sense
Speaker 1: decade long opportunities in fixed income for people who are
Speaker 1: looking to add cash and want to keep it conservative. Well, absolutely,
Speaker 1: and you look at this, and you look at two
Speaker 1: year yields at four point many four point three, I
Speaker 1: mean that represent value surely and also safety, right and
Speaker 1: I think that you know, for a lot of people
Speaker 1: looking to deploy cash right now are looking and saying,
Speaker 1: you know, as we're heading close search to a recession,
Speaker 1: then farther away from it, where do we put our resources?
Speaker 1: And my answer to that would be to stick with
Speaker 1: value oriented equities that are divid in paying stocks. And
Speaker 1: then looking at the fixed income opportunity where we've seen
Speaker 1: such a draw down. Do you like a mix of
Speaker 1: because you talked about a mix of fixed income, you know,
Speaker 1: including sovereigns and credit, Uh, what about muni's? Do munies
Speaker 1: look pretty good here, particularly given the tax free nature. Absolutely,
Speaker 1: I mean municipal bonds have been hit UH incredibly hard
Speaker 1: year to date. And yet when we look at UH,
Speaker 1: the credit quality of these municipalities, their flush so around
Speaker 1: the country, these are municipalities that are going to pay
Speaker 1: their debts. So absolutely, municipalities are a great opportunity tax
Speaker 1: nature as well. You know we've got this aggressive FED,
Speaker 1: that we've got the possibility of a recession. Well, to
Speaker 1: begin with, how indeed, what are the chances of a
Speaker 1: recession this year and next? And secondly, how much pain
Speaker 1: do you think the FED is willing to place on
Speaker 1: the US economy? Well, the set is definitely talking tough,
Speaker 1: and what they're doing is saying that they're going to
Speaker 1: be tough going forward. And if you believe what they're saying,
Speaker 1: then certainly it's going to be hard to hit a
Speaker 1: soft landing. And they've stopped even talking about a soft landing,
Speaker 1: which indicates they're willing to go to a hard landing.
Speaker 1: So certainly that means a recession. And so the big
Speaker 1: question is do we believe what the FED is saying
Speaker 1: or in fact, are they going to talk tough and
Speaker 1: hope that things somewhat slow down and inflation starts coming
Speaker 1: down and then they can then pause. So you know,
Speaker 1: I don't see a recession in two and and it's
Speaker 1: it's very unlikely in two and even right now if
Speaker 1: you look at what's kind of been priced in the
Speaker 1: chance of a recession twelve months out. But having said that,
Speaker 1: I think the likelihood of a recession in late is
Speaker 1: very probable. So that makes it a difficult time really
Speaker 1: to get aggressive and probably even to to do a
Speaker 1: lot of buying in the equity markets. Um and and
Speaker 1: particularly you started off with talking about investment grade corporate bonds. Uh,
Speaker 1: is it likely that we're going to see a pretty
Speaker 1: sharp revision down of earnings expectations over this next period.
Speaker 1: I think we're already seeing that from analysts, and I
Speaker 1: think we're going to continue to hear that. And the
Speaker 1: question is do earnings just go off the cliff or
Speaker 1: is it just you know, that you know, continuing to
Speaker 1: slow down. I do think though, that it is an
Speaker 1: opportune time to overtime time be purchasing in equity, So
Speaker 1: we are seeing opportunities there. So we certainly do see
Speaker 1: some opportunities that I think, um, you know, people could
Speaker 1: take advantage of, but certainly on the more defensive, cautious way,
Speaker 1: And I think for investors to be thinking about that,
Speaker 1: their opportunities right now and taxable accounts would be to
Speaker 1: take tax loss harvesting. And if in their retirement accounts
Speaker 1: they're gonna they're gonna want to hold longer than doing
Speaker 1: too much of selling because you're not going to get
Speaker 1: any kind of tax advantage. There. Tell me something here
Speaker 1: as well, when you if you took your views as
Speaker 1: a month ago to what they are, how would they
Speaker 1: have evolved. That's the first part of my question. And secondly,
Speaker 1: do you think that the merchants have doomed for Europe
Speaker 1: over egging it? Right? So we certainly have changed our stance,
Speaker 1: and that is that's changed along with the Feds States.
Speaker 1: You know, really Jackson Hole was a pivot and ever
Speaker 1: since then, you know, to take them seriously as far
Speaker 1: as what they're saying, UM would mean that we need
Speaker 1: to be more concerned about this hard landing idea, and
Speaker 1: so yes, I would say that we have pivoted as
Speaker 1: well to being on the more cautious side preparing ourselves
Speaker 1: for a potential recession. Having said that, I would also
Speaker 1: say that not all recessions are created equally, and we
Speaker 1: are not expecting a severe recession. And that's why I
Speaker 1: say that even through this trough, we see opportunities that
Speaker 1: I think people can take advantage of. And then to
Speaker 1: your point about Europe, I do think somewhat it is
Speaker 1: potentially over overdone. And although this nord Stream pipeline is
Speaker 1: is another big issue and that's the latest news, but
Speaker 1: without what we heard is that Italy is prepared for
Speaker 1: the winter. And so you know, the question is, you
Speaker 1: know how many countries are in fact they've been preparing.
Speaker 1: Maybe they're more prepared than we think they are. Yeah,
Speaker 1: but you've just outlined you've got a slowing US economy,
Speaker 1: a slowing European economy, and a slowing Chinese economy. Well
Speaker 1: that's a that's kind of I think we're out of time.
Speaker 1: I don't think we can really go into this, but
Speaker 1: you know, it paints a pretty nervous picture out there. Loreen,
Speaker 1: thanks very much,