Planstrong Financial Forum 02-11-17
Feb 13, 2017|
"Smart investing, simplified"
Transcript - Not for consumer use. Robot overlords only. Will not be accurate.
They both plan stroll in the broadcast studios it's good play and strong financial forum where your host. Kendra are very humbled president Clinton's role you're best about a month. Full portion they're still I'm Bruce Morton investing. Simply thought that I didn't per birdie at the Eckerd. Us along with Paul Parsons and disciplined strong financial Foreman Paul welcome back to the program. How you feel these days Kenny after all that shoveling. Well in a little sore consistently shuttling back should the knees this is one of those times and missed my children being children. That's not the only get a jump on that you and I both had healthy strong sons whom of course in the old days we would have thrown the shovel to law. Hey I'll be right now to help right behind you. And now it's up to us off now it's a dog looking at a slower if you filmmaker path for me what am I gonna do here so my heart goes way too little she did during the Carlos I don't graduate of life but that would that we had an interest in week aside from the snow and we did have the patriots for all of disable that may cause a little parade after that yeah. Off so what's that well was out on almost unbelievable things ever and I don't think we've ever seen the game early that nor will we again. Hi I honestly I love sports I love watching sports I know you when I actually talked about this last week before the super ball and said you know. Which we talked a little bit about superstitions and you know are you superstitious do you like you know sit in a certain spot and don't move and all that and our soul our SaaS preparing for this week show. I young listened to date does the up on the replay of last week showed just to make sure I wasn't redundant on anything and I was chuckling sound because I was completely guilty. Of what excuse myself a problem. Lee going today you're darn guilty basically we wheeled the victory impart to you how hot. You and your wife here by electing the same thing we write she was off she felt all along they are going to Windiz. All because it was not in in the third quarter and she gets into the deployment and went and then suddenly this article and actually senate. Mary stay right there is still keeps saying we're gonna say I don't know and endeavor because the negative vibes pretty familiar I thought enough about that so she stayed right there in the same seat and if she willed us to victory. Well once once I'm discounts you missed the extra point returned in my life that John this is up triple meat is just not their day right. Well that moment one of our dogs jumped up on my lap and and later across me and my chair and so I'm sitting there with her dog and and you I'm petting her car and then they hit the patriots start to come back and I realize I'm petting our dog and exactly the same spot on what kind of her side. And so for the next hour hour and half maybe. I convert aren't exactly are no one moved no one said a word we are stop breathing for a while pressure and most importantly I think our dog I was a bald spot and that puck and that little location on her side were I refused to stop petting exactly that location itself whether it was Miree being positive for our dog allowing meat Packers just on her side just write whatever was. The patriots won and we take full. Credit yeah absolutely be very much involved in that victory differ from our coach does that effect but not a just it was an amazing weekend we got to finally see some snow again it's only we miss it until we see it all and then we and then some in Sydney Moore. Yeah and you know what's funny to it it was kind of deja Vu all over again right eye as soon as you get when these storms ago Ono is this gonna be like Tony fifteen when it didn't do anything until the second week of February and it's like an old how firm that and and you know I think of it too then of course there's some investment geek I start to think about it like you know is this a a sign of something to calm. And I started to think about you know. Armor clients we've been doing lots of client or use notes after the end of the year. We talk about what our investment strategy is moving forward why it is and so forth. And the big thing that became incredibly clear to me as. Think about where we were a year work there you know and and where politics warrior golfer whether to think about where we were politically and economically right. And you fast forward to where we are today and I don't think it could be more diametrically opposed to right I mean if you think about a year ago a year ago. Do you think there are a lot of people thought that Britain was only European Union don't nobody will not I don't know pick a year ago the people thought that the price of oil the end of the year was gonna be fifty or 55 dollars a barrel on there remind you was. Thirty going down when he five wild okay right nobody saw during either OK so they are okay and then you don't think about. Anybody think Donald Trump was going to be the present United States not even Donald Trump I thought. I think you're right nobody I mean I I think he envisioned at you know kind of like up a golfer tries to vision and our shot before they they you know they exited the shot that. You know beyond that I think it was Hammond a very small hockey it's hopefully the family and that was about it right so you think about that and all of what that meant. As it relates to how we wouldn't fast. And now you fast forward to where we are today. And it's entirely different Britain has elected to leave the EU and there's very little more discussion now about them trying to wiggle their way out of that referendum it's gonna happen or leave it right and and then you know Donald Trump is depressing United States whether you'll like it or not he has and he's talked about a big tax cut. And a big tax cut means big economic growth you know and this by the way this isn't a commentary on. Politics this is a commentary on what we expect to happen in the economy and I'm also not a dressing for example whether or not it's affordable. What I'm looking at is what will look duty the economy in the shorter term. And what does it mean for investors and she'll look at that you say hang a tax cuts the ultimate aphrodisiac for economy it is yet it's as good as it gets. And you know we've talked about that in the past right she's got that come and operate. And then you look at it you know some even think about some of the industries that have kind of come in to Faber vs out of favor Mike one of my favorite ones are best examples of that. What do you oil industry and and the pipeline industry specifically your. You know a year ago. Yeah you know old Luke could Hillary Clinton as secretary of stated Ari kind of taken a pass and weighing in on the keystone XL pipeline but Bora President Obama. I killed essentially said no we're rockets that. And then you know he had to decode axis pipeline where they should yeah that's that's I don't think we can make that happen. And you fast forward to where we are today and president trump has already said. We're those are approved go ahead let's skull let's let's make them happen so all of a sudden being any oil pipeline business doesn't stink. Now it's actually quite an attractive market now you know an and the list goes on and on you know like another one is banking you'll think about banks a year ago. I think if anything to look for more regulation stop on the banks not fewer regulations. Now you look at trump trump saying hey. I think some of these regulations are good. But some of them. Frankly don't add value of some of them really add incumbents lose to allowing small and midsized banks to lend to small and midsize businesses. And so I think we're gonna see real changes they're what does it mean it means things are better for financials now than they work say a year ago so. The point of this diatribe and forgive me for going on for so long is. If you invested the same way now that you were a year ago either you work paying attention a year ago or you're not paying attention now. Great so that the set and forget folks I may find themselves really underwater forgotten kids forgotten yet so this should be a great time then for those folks who perhaps haven't looked at their portfolio. In the last year or even six months did you your office a call and say how do YE a real line this for the current political situation. Right absolutely I mean this is. This is not something that you should have the same strategy a year ago vs today if you do you are really struggle would why that makes sense and postal free numbered and you McCall and save par helped. Is 8889727526888972. Planned or go online to plan strong Dodd's comments in the mini mill. And and this is the time it's in the is that still the beginning of the year yes and as Guinea in the new administration we are seeing a pot of different things going on as Paul mentioned. The oil industry with tax cuts. Think things are changing insurer and if you are if you're portfolios line the same way it was a year ago power or in six months ago. The noted this is certainly a time to make some changes. ADD 897275260. Let's talk about what has been happening in the markets pull start the with the US dollar market. So this week US stocks were modestly call it half a percent three quarters or percent somewhere in there are international stocks ultimately flat. But think about this year to date what a week a month and a half through the need to prove to us at the European. On DS and 500 which as you know is an index of 500 of the largest publicly traded stocks. It's up almost 3%. Ian you know what does that about nine of the year eight of the year. You know multiply that by not eight or nine that's 27%. I don't know many people who would turn their nose up to 27%. Tight beer and I'm not in I'm not suggesting that that's gonna happen. But what I am suggesting is Christopher and I start to the -- yet and it's certainly beats last year's hero when during the exact same period of time the S&P 500 was down 12% to write those are beginning of this year talk about a bad beginning that you have to show bully your way out of sorry for the snow analogy there for comment but we had did really dig our way out of that right and on the other hand we are up 3%. Year to date in the first six weeks this year that is a very very nice start what about the on the bond side both centrist and on the bond side. On prices. Went up a little bit this week and as a result yields went down a little bit you say why is that surprising well stocks went up this week. And US bonds went up this week as well that's your typically it's more our common. It did it for people either to have risk on which means buy stocks or risk off which means people buy bonds. In in the case of this week we actually saw the demand for both of those security school up in the United States. And so. Are the US tenure US treasury treated with yields down about five basis points or point 05%. To about who point 4% this week. And on you know if you look at what happened internationally he saw similar yield decreases. On German bonds the ten year German bond. Is now what about the point 3% per year for the next ten years. And on on the Japanese side. Dear rates remained relatively constant at about point 1% a year for a ten year bond not her contract you have to move yards per share. What do the outlook for the Fed increasing short term rates yeah so it's interesting it continues to look. Like the Fed is not going to raise rates in mandate. And the probability is increasing. Our to a very high level that they will do their next read increase. In mid June meeting. And that's what we're seeing with probabilities the probability of of a may rate increase is now. Only 28%. I would 72%. Saying they don't think that that's gonna happen. Always come back we'll look at the dollar oil prices and some more talk about corporate earnings were murdered turned its plan strong financial form this just. All Parsons president of planned strong investment management. And you're listening to them planned strong financial forum on WRKO. Dawson'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 me as I can sequester investment management is an affiliate of mismanagement grouping concluded that any Washington street and Massachusetts. Hi this is Bobby 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 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 no matter what your 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 group and member farmer SIPC plans to investment management is not an affiliate of next mention grouping and is located at 980 Washington street Dedham mass. It's. OK okay. Okay. It's. Yeah okay. Crumbled and strong broadcast studios is the epicenter of definitions. This is no plans strong on national forum where all portions president of planned stronger investment management. And I'm Don Garber at the anchor desk. Postal free numbers and he needed 9727526. And you can you can call now and you can just leave your name and your email address phone number and it's a new we'll get right back to you on on Monday morning and senate but no obligation portfolio were view this is the time where you can sit down with Paul and his team and say. It ball things sure have changed in the last year or so what should I be doing differently and policy morn having to take a look at that canned or obligation nor cause to do what you know. What makes sense for you now given where we are now in the new political situation. In 889727526. That's 888972. Plan or go online to plan strung dot com and just shoot them an email and go right back Q. Apology you know I notice as as you are taking your sweater off and rolling up your sleeves to little warmer the studio. You look like he lost a few pounds. Oh no what does the nicest thing I think you ever Sesame Street is I have I have I dropped the fuel and working on I'm on a new diet. And not so far I haven't been that angry that much of the time yeah because I remember some of your other diets pool and you. Yeah I stayed away for you prefer fewer of them we don't have discovered. Salad dressing is that your friends are that make your own oil and vinegar and our great kinds of flavored oil and vinegar it's unbelievable how good it is and is America far fewer calories and and stuff chemicals that these salad dressings you know those gross things and were big in the seventies the creamy multi flavored Salinger as oh yeah that's why you what you just. You're a lot journalists are good story of the it is good I can break is on the that I am I just kinda hit the Waller said you know what I need to make a change your I don't Libya another polar bear who comes out of hibernation our offense says. Geez look look at this guy so anyway yeah I've been working on open non. Action might Weisman doing it with me which has been very supportive and you know I haven't had any in my favorite foods for a month and a half so be kind of doing okay well don't being nasty to the bear. Pardon me during the football game we didn't cheat a little now I have I have not had a snack bar in a month and a half. Nothing not a potato chip nothing man yeah. Well so my Treo but what I will tell you this I haven't stopped drinking. Well you know commenced draw lines somewhere ex athlete right. In fact I remember when I was talking to a dietitian my time this well. You know the way if you really wanna do this you don't just do you know more rough original and what you don't drink alcohol from that I looked artists that. Can we move on the subject and that's just sort of things that I'd rather be fat and Dyer a definite enhancement act that I've written. Up unrelated to its working so far wherever it is our right thank you you're still smiling IEA now maybe even actually UB grumpy well you know kind of comes you've got a couple focus Arafat a fifth all remember talking about that what's happened over the last week out. India and the. US stock markets and down my things around a little bit in the stock market the bond market also holdings were up a little bit yields were down a little bit. And you know what the dollar strengthened slightly against both the Euro and the yen this week on the good dollar now is back to a dollar six per Euro which is a pretty strong. Level and about a 113. Yen. Opera US dollar so not quite as strong as it had been against the yen earlier this year but you know still quite strong about the pace tool and watching them well finally came to its weakened a little bent against the peso. And that's not saying much because in the Pitt had killed the pace so for quite some time this year. And not it's now only up about 12%. That pesos devalued about 12% since trump was elected and you may were called I was almost up to eighteen or 19%. Are earlier you know this year while we're talking but that's our. The pesos were covered a little debt. But you know but the big problem when Mexico is that they actually had to raise their borrowing rates this last week. I'm and they race them front and by half a percent so fifty basis point that's a big inquiry on so they're short term borrowing rates our six point 25%. As opposed our set. Point five to 75%. Just to put it in perspective freight. Know what an oil around the semis you retard throughout oil had just about bottomed out who's doing really low reached. Arena well oil continues to kinda trade and a relatively narrow band. US manufactured will. It's around 53 dollars a barrel this past week and it's about 56 dollars a barrel for Brent crude which is essentially the North Sea oil. On and good the bad news was that crude inventories were up again this week in Iraq being here fourteen million barrels just to put that in perspective. We're used to seeing much smaller numbers than around. What that means actually is that that you drive the price of well down because you have more inventories. Then you had the prior week. So that's not necessarily good news at all. Not a lot of government data we have a lot of released last week now have been during this we had tons well Garrett and it was all you so much was really important stuff and most of it was quite Goodell right. So and and I again forgive the though pond but that's really fueled a lot of the optimism Paris and and if you will be animal spirits of the marketplace at this point which is. I think one of the major reasons why you're seeing. For example while the S&P 500 B 3% year to date in you know the first six weeks of the year. But back to your question do video only key data point that was released this week from the government was initial jobless claims. And that came in incredibly. Good he came in at 235000. Which is very very close to build the lowest level that it's ever again. On and you know what it does is it says people just aren't laying people off now and that's a very very good sign when it comes to the strength of the labor. Market and also frankly hopefully we'll see some wage inflation moderate wage inflation. If fewer and fewer people are getting displaced or makes sure. I corporate earnings we've been getting a lot of data from Q4 we're getting some of the most of the big ones are in now dubbed don't we learned well it's you know continues to be good they're on you know you are right in the heart of the batting right now as far as when corporate earnings come in following the close of the quarter so Q4. 2016 corporate earnings are now being reported by all these big companies. And about 60%. Of the companies are in the S&P 500 which we sent us this index of 500 largest publicly traded stocks. They've reported. And the blended or earnings growth rate is currently wait fort five point 2%. And don't forget when we started this quarter. The official estimate. Was less than that was three point 1% and one Royce radio I says that's going to be. Summer between 2.3 percent understated and I expect to see five to 6% corporate earnings growth. Well guess what's happening we're watching as more and more companies report. They and they tend to like to set the bar a little bit under. And then I like to outperform so that they don't surprise the market and as a result that's exactly what we seem. And so we're looking at. A growth rate of Q of Q4 grow our earnings. Of five point 2% which is significantly better. And then the initial estimate and it's certainly better than I Q3 and remind folks you don't listen every week why that. Corporate earnings number is so important it's incredibly important because if earnings growth think about it this way the way a stock. Of achieves its valuation. In many cases has to do with what kind of earnings the company me straight and so there's a thing called the price earnings ratio the price of the stock vs the earnings of the cop of the company in earnings per share. And what are essentially happens is people are willing in certain market conditions people are willing to spend between ten. And say sixteen or seventeen times earnings. Too I'm biased stock. And so if earnings coop and you keep the exact same stock multiple well guess what happens the price of the stock should go out. So if there is good earnings growth that should translate often translates into good stock price group and as well. Are there any particular companies a release and we should be paying attention to Jack couple good ones that came in off first of all energy companies continue to finally. Eyes start to turn the corner here it looks like this is gonna be the last quarter that earnings of energy companies will adversely impact earnings growth. And other thing is that IBM and apple. Actually reported this past week and they both outperformed expectations. And so it just one last thing on earnings Kenny if you think five or 6% earnings growth in Q4 is good. Wait TC 2017 this is another reason. Why the markets are so strong right now for all of 2017. Analysts are projecting earnings growth of 12%. And revenue growth of 6%. That 12% earnings growth. Who really can fuel some pretty good expectations as it relates to where stocks could be go. Well. Moving towards the international front some news out of there weren't paying a lot of attention what's going on in Europe that's that's really become very important to us here. When we seen. Well the first of all it to exactly what you said you're sick but where you were a year ago. And you look at Britain then voting in June to actually the people Britain not the parliament the people voted. To leave the European Union in June. And armed that was really the first major shot across the bow of the perhaps the European Union. May not look the same in the future as it did at that time. Well then president trump became president trump which was another populist move and that fuel continue to fuel. Eight populist type movement in Europe. And you know there are additional. Major. Presidential races there are about to occur in Europe over the next three to six months we've talked about those in the last few weeks including. Not Italy and Germany and France are well this past week fell eight are a very under reported story in the United States but he very front. Page news story. In Europe Kmart I really thought it was important for investors to her about it and what are really says it is. That the United States is not the only place where you can have a leading candidate self in mold. Okay yeah so you don't marine Le pan. Had been leading bomb and and she's kind of considered far right she's considered the populist she wants to get out of the European Union. And the person. Who are most people are most experts if you well thought would Altima we win in a coalition government against Le pan. As a man named Francois feel long. Well it turns out that mr. feel lawn had a little problem in this past and what it was what was revealed was that. He actually put his family members on government payroll to the tune of 900000. Euros. Over a ten year period. And gas swat. That kind of hurts here and I and especially when his wife who was one of the people Penelope was put on the payroll and when asked what she did she sent I don't know what you talking about so things didn't go very well. So why is this important it's really important because what it means is. These are these were been coined that in the press as fake jobs. This could really hurt this man's ability to win and packed many people call for him to step down. And what it means is there's more risk again. In the European markets and when we come back I'm gonna show you how that risk is reflected. In certain secured extra. That's when we return to support a strong financial form. This is tall 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 immediate take a look at your investments and retirement plan called my office of EDD 897275260. That's 888972. Plants and. 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 it's time to get organized and to make sure you have a financial plan. Who protect your retirement. If your financial life together. Paul Paul Parsons a plan strong investment management just schedules financial checkup call 888. 9727526. That's 888972. Planned commit to getting your financial house in order call 888972. Plan or vision plan strong dot com. Securities and investment advisory services offered through next financial group linked member humor SIPC plans to investment management is not affiliated Nixon campaign and OK I need to Washington street doughnuts. Says financial talk into your signing and being informative. At least it's informative its plan strong financial forum where gold portions president's bold plans stronger investment management. And I'm Dan Garber at the anchor desk in his class strong financial Foreman wants dimples toll free number eight BB 9727526. If if your portfolio is still position that we was a year ago. You may be in a little bit of trouble how did you call it call for you may have certainly underperformed yeah sure all right and so once again bulls' number eighty Dade 9727526. ADB 972 plan and you will sit with Paul and his team of politics aren't everyone of these meetings. To let you know what they think might make a little bit more sense given where we are right now. Politically and economically. So all we're talking about Europe and what's happening in particular in France in the right in this in this mess to new. Believe it wow I mean 'cause I think so many people say only guy who you know marine -- and you she's she's gonna go when she's gonna get 30% of the vote but you know listen in the end it feel long is gonna come and and he's a senator guy and then India France stays in the EU when all is good don't you know don't don't get yourself all worked up over this. And patent. This guy self remotely with. Oh yeah I I had my family members on the government payroll. You know to the tune of almost a million euros. And over a period of time and and at that that's crazy land Troy especially since. Didn't even know what they were doing well you do one thing if there was an actual job didn't perform well yeah I mean it's not exactly a big make an excuse Ford but. To put the family members are on the payroll and they weren't sure what they did yeah that's not so good conduct this study that says. Kind of takes away the credibility on a dozen or so decent you know there were a point to seek jobs and as before or to the break I mentioned. That you know this is really starting to show that there's more risk in France is now and more risk that that frankly France my eight. I'd go towards leaving European Union and a day if you wonder why we're talking about this. 'cause of France leaves the European Union European Union isn't the European Union anymore you know France is the second or third biggest economy. I'm in Europe and if they're not and it and and by the way also lot the UK is an addict you kind of miss and some big players now that the book has. Second a little bit on this ball because it wiest really spent a long time talking about Greece and what they were going to throw you know here's the so it seems like. They really work hard to keep the countries like Greece who really aren't true helping you can afford dog can afford or can't afford it they keep them in yup they're losing. The little that the countries that are really bringing something to the table. Well the payers they are the ones who were leaving Canada and the ones who are the receivers that they can't stay long enough let's let the bad gas you know it's like the guy that keeps eating. He's going to stays at the table right. And and unfortunately in a way that's what we're seeing here. But one thing I promised he was well Heidi and told us how do you notice him a bigger probability other than say you know holes and stuff like that well the beauty of being in the investment business as you can look at different investment vehicles and they actually if you will handicap. How much. Up more risk their wrist that something bad could happen here. And what we're seeing. Is the difference between the yields on French. Our sovereign bonds verse is German sovereign bonds is actually increasing both countries have very you know are are are in good financial shape right. And yet what we're seeing now. Is that the yield difference on them has increased. Odd to about eighty basis points which is that's a lot now okay. That's point 8% that's a big spread and by the way that's the same spread as in 2012. Are and what it does its signals decreased confidence in the country's current continued participation in the European Union and it's not just. French bonds vs German botch its French bonds verses UK gilts. It's French bonds vs the US treasuries amid. What's the market is saying the bond market is unequivocally saying is that France has more risk now than it did. Three to five weeks ago. Okay current. You'll pay attention to learn going forward polished moved back to the US and apple is a big sale of bonds out of apple wells are actually too cool big bond issues in the last two weeks and I want to talk about because. Again we have a lot of listeners that by not sure that and rightly so I mean fixed income should be. A part of many people's portfolio especially high quality fixed income and apple. And Microsoft both did a bond issues in the last couple weeks and wanted to talk about this just to give people feel for what kind of rates are getting paid these states and here's the deal. Apple sold ten billion dollars of bonds this past week. With the ten year paying about 3.4. Percent okay think about what I said about a ten year US treasury that pays who point 4%. So the difference is call it ninety basis points or one or almost 1% TO OK. And that is if you say to yourself in Wallace sat and attractive bond. Why I have to tell you a three and a half for ten years feels better to me than 2.4 percent feels right for tenure right. And if you look at the credit risk do you really think Apple's not going to be able to pay off their bond when they're sitting on the you know literally. Hundreds. Of billions of dollars of cash. And right. So that the short answer is the reason by the way they're borrowing this money is because they're waiting to repatriate that cash I go and ask him in days gone otherwise you are all right you borrow as you can't access the cash and what they're doing. Is there waiting until the tax like changes and the certainty in the tax law changes before they repatriate that cash. So what they're doing in the meantime is borrowing at very very nice low rates but as an investor you might say. That's a bomber might be interest and and certainly more attractive than a ten year treasury. With you know more risk goes apple can't print money like the treasury count but what Apple's a pretty strong credit in over ten years are they still gonna be in business list love money. And be able to honor their their commitment my guess is that's probably pretty good bet most people would see it that way. And by the way demand was strong for so they sold ten billion dollars worth of bonds. They had their orders of 36 billion dollars so in all almost four times on the order flow for that kind of a bond issue. And you know a week prior Microsoft had done an issue. And they sold seventeen billion dollars of new bonds with a ten year also paying 3.3 or 3.4 percents. On and these bonds whether it's apple or Microsoft are really good examples. Of of how companies are borrowing now before they expect rates to go up because they expect rates to go up. So they're getting in now they're trying to lock in a low rate for longer. On you know and you're getting three and a half percent from high quality company it's something for investors to look at as I said. It's not as creditworthy as US treasury but it's still very very credit worthy in the in the spectrum of bonds now we seeing any change in the way folks from investing in bonds are folks going a little riskier at this point oh yeah I mean that's a I think it's really interest thing here is that. Arm if you look most recently at how bonds are going especially the riskiest box. They are actual leak. I'm doing better their prices have gone up and their spreads have gone down let me explain to what I mean by all that so the riskiest bonds are called are triple C there there are very low quality sponsors of real chance. That you know these bonds will default OK and that's why they pay high rates but with president trumps promises. Of a strong Greek economy fueled by lower taxes. Less and less regulation. Junk bonds have been more in demand. And borrowing by some of the least creditworthy and these companies now carries yields of about 10%. Okay now compared to 21%. In 26. That is a huge reduction has that it can yield which means the price of these bonds has gone up a lot. And what it really reflects is it that. On investors are less worried at least in the shorter term. But these companies will be able to meet their obligations so they gave up reduced their demand for interest rates as a result. But here's something you should know as a as a junk bond investor especially a junk bond investor in the lowest quality junk bonds. There's a real maturity will all of these issues expected to peak in 20/20 one what does that mean means a whole bunch of these bonds that are issue and all mature at 20/20 one. Okay and so at that point. If they can't refinance. Then you've got a problem if you're that company. So arm and or if perhaps our business conditions aren't as good and they can't refinance as much. It also poses a problem so it's gonna get really interest and my sense is that there's real risk would ease and that certainly. That the kind of I'm yield premium that you're getting paid to take on the riskiest of junk bonds. Is incredibly low right now and I would certainly advise you know investors be where. Delicate ball. President trump has been talking about. His tax plans phenomenal phenomenal. It's phenomenal to Iceland nominal our guys and Tom what have we learned about it so far more and move league at some of these details. Well and we should get details in the next couple weeks that's what he really announced in the market responded to it very favorably and I think it's because. You know as with any saying it's what have you done for me lately and you know the guy's been in office what three weeks or something for we are three weeks and you know people say all navy's knock into a tax cut right away and and there was some concern about that well. He wanted to make Sri putter great backup in the forefront that there will be tax cut it will be a substantial tax cut in May even be a phenomenal tax break but one way or rather that's a very important as what do I say Dora listeners you know about this before the most important thing the president trump has talked about it is and regulations it is an infrastructure spending it's the tax cut backs what is gonna fuel economic growth. And as a result hopefully market growth. On over the next year 20. And a half it's actually are predicated on the idea of having a significant personal income tax cut as well seek corporate income tax cut. As well as the ability for companies to repatriate. Cash and he significantly lower level than they would today. Although we come back we'll talk about something important bobbled snap jab which our kids really care about and also energy pipelines. It's supply and strong finance reform. This is tall 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 immediate 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 an extra to prevent member to go as I can see classroom investment management is an affiliate of mismanagement grouping is located at any Russian diplomats who threw six. Hi this is Avi Nelson. 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. You should have a fiduciary obligation to act in your best interest. And be paid the same amount no matter what your invested in if these things matter to you. Call Paul Parsons at planned strong investment management to learn more. Call 888. 9727526. Hiring the right advisor could be your best investment. Or visit planned strong dot com. Securities and investment advisory services offered through next financial grouping member tumor SIPC plans to investment management is not an affiliate of next financial grouping and is located at ninety to Washington street Dedham mass. Finally your really your show is not trying to show you insurance for movies. This is the plan strong financial forum quick call portions. President called supply and strong investment. I'm Don Garber at the anchor desk along with Paul Parsons a reminder of polls you'll remember because as we mentioned at the beginning of the show it's your portfolio is still position the way it was a year ago under the Obama administration. Three months ago you'll Georgia sure I'd certainly drew months ago we didn't know who the next president would be. And you need to take a look at it and holdings of Jeanne Meserve there's a new sheriff. And with although we have a tax cuts are phenomenal actually are not O could could catch up there are that reduced bank regulation of the pipelines or while out on now all of a sudden you know pipelines aren't bad anymore now there are good again and and then moving on the fast yeah oh absolutely so if your investments were put together would under the previous administration. You do some work to do. Got some spleen and yeah. It's a ball on this team will be happy to simply you know constant obligation and that you know what makes sense in this administration. From your portfolio. Eighty 89727526. Is follow number 8088972. Plan. Or go online to plans strong dot com. He said with Paul and his team and the straighten me out because boy things have changed boy have they have and they continue to change our daily base our. I mean just like we talked about would would what's going on in France right now and what that could mean to European Union and the European Union has are you know a serious pick up. You know what's gonna happen that's that's gonna slow their growth significantly if you dare growth slows then you know it's got to spill over to the rest of the world I mean you're just too big. Exit for the rest of the world not to be impacted by. Else's remind our listeners that this kind of research who we talked about on the program assistant. Just the tip of the iceberg it's a type of work you and your team do. When you're looking at someone's portfolio in their investments and you making plans for the future it's because of this kind of research that you do. Absolutely and you know what I just you mentioned financials to Kenny that's a really good one because. Think about were we were a year ago now a year ago or even this you know and took in 2016. Overall GDP growth less than 2% and it doesn't exactly sound like the economy's humming along right right wolf that's the case do you expect interest rates to go up. Probably not a great both interest rates aren't gonna go up 46 gonna happen if financials. Not much straight ahead and and by the way if anything you know under a democratic administration would you expect regulations to increase or decrease on financial institutions increase right so if you if I if a democratic been in place you would have had low interest rates for longer works and you had increasing regulations neither one of those sounds terribly appealing if you're Jamie Dimon from JPMorgan Chase Wright broke I. Now let's talk or who is president present United States now is gonna Donald Trump was he said he said well first thing on to a massive tax cut eight phenomenal. Crowds got real you have to work that. A phenomenal. Tax cut right what's a tax cut deal. It fuels GDP growth unlike almost anything else the last time we saw GDP growth like this that I expect us to see. Happened after the last two times that we had phenomenal tax cuts under John Kennedy and under Ronald Reagan and in each case. GDP growth was call at 2% before hand and want a 45%. Afterwards what happens when the economy grows a lot of people get employed. When a lot of people get employed nurse a scarcity of labor what happens there wages go up when their wages go up what happens if inflation goes right when inflation goes up what happens interest rates. Interest rates go up or when interest rates go up who impact gets impacted the most of any stock. When interest rates Glock financials. The Shia are paying its guess you have so thick of that arm I mean it's just incredible and do you think under a trump administration based on the of the first six weeks and the kind the odd things they've been saying about Dodd-Frank. There's gonna be more or less regulation and finance us some senior lesson in the in the future I I think that's a fair comment and so you think about that. The the outlook for for financials went from guarded at past two hates this could really. Go pretty well for financials why don't like go through this wanting because what it means is harsh. Things have changed a ton in in 063 weeks you have to go back a year ago if your portfolio looks the same now as it did. Six months ago. Our eye on talent I really think you're some adjustments to make and if you don't you're leaving money on the table. Yet nobody wants to do that snow and especially when it's eight camera tower can afford to were tar cannot afford to live the lifestyle I wanna lift. That's so we do when we manage money and our goal is to is to generate the kind of returns of our clients need. At at a level of risk that's appropriate for their circumstances. And that's and that's a good point Paul because you do start off with a goal in the goal is different for each person you talked to console was some folks are younger or older have more or less money but. We all wanna get to a place where we're comfortable where this is something that works for me this amount is what I need and so your goal is to get people. Absolutely right and can I just say this and this is not a political comment. But things just got easier from my job for the next six months because. There are some real opportunities out there that we see that we are capitalizing on right now and we had several opportunities in 2016 by the way through that paid off very handsomely for us that we identified as good opportunities. And we find ourselves in a similar situation now because there's been a change of administration. It's a whole new set of variables that many odd you know panned out to do quite well that may not have done as well how to deal election results the different. So want to get to see with ball. And his team and have him kind of dark view about what we're your portfolio should be given the current situation is still remember ADB 972. 7526. Pub before the break I talked about snap jab which is our kids have you ever done that as a matter Fred to have you only have you really don't I still have one younger younger daughter all of her kids are younger does so she makes you mead data look and so yeah I do it wow calm so explain to the audience would snapshot. Basically you get to take a picture and share with you friends but he disappears. After some minus ten seconds yeah something hard to see the counts down. And then it goes away yeah so calm this the idea is just to make a quick I guess it's it's something like Twitter with pictures yeah because it's short and it's quick and make a funny statement and then it goes way you move on to the next. And if you look at why the company was set up it was specifically in reaction to the fact that if you put a picture on the Internet it's there forever right right. And and you know kids not being back dom said I'm not try once some of these pictures on the Internet you are exactly and what snapshot did was they said we can fix that won't make the picture going after ten seconds. But what are really did was. It made the application at eight did have a different group of users than say FaceBook because you gotta be pretty close friends to wanna share something with somebody that's gonna disappear after ten seconds I mean essentially what you're saying has. Hey this is just between you and me in Ireland which you get a glimpse at this and now and it's going away right and it's because it isn't good for either one other aspect of this to be out earlier in the public domain. Well if you if you watch it kids. Especially. I need my daughter and her friends it's usually a goofy face yeah they choose your reaction to something so they're making a purposeful ugly face again which will get a laugh. But please don't save that send it to my boyfriend or more personal habit you know have on a future employer look at Madison now exactly what was a sort IRAs and he's just don't want that stuff out there let's snapped chat. Well also snap which is the company that created that messaging and a published its IPO document this week. Ott and and it it included. Our shares with no voting rights and how is that there are okay all right and by the way it all they have are plenty of losses now socks I does this feel like 1999 it does okay. Here's my favorite part. Our user wrote this also slowing that's not good either and OK is she got those three are extort. Snap is trying to raise three billion dollars. As part of their overall valuation of 25 billion dollars is that a stunning number follow up. So it's gonna be really really interesting to see how this thing pans out right now snap has about a 150. Million people. Open the app an average of eighteen times a day yet this is something in the Q zoo a loss and guess. As you said the user base eighteen to 24 girls okay and here's what's gonna happen success is really gonna depend on how the company defines itself going forward. And how much advertisers. Value that demographic. And what kind of user wrote this can happen in the future. It's gonna be interesting I'll be it'll be fun to see how this thing plays out always fun to talk about the new IPOs this is one of the biggest IPOs in quite some time. Well we talked earlier low tech energy pipelines and how things are changing their errors so. With president trump does it once again getting getting and move on blitzes and with coupled pipelines. How were investors reacting to the. Well there's been a real rally in pipeline companies are two more than fourteen month high as a result. And this is just because as we mentioned earlier trump approved the Dakota axis pipeline and the keystone XL pipeline right. So all not not you're seeing pipeline. Tight stocks go up pretty significantly. And pipeline and energy storage bowlers. Have rallied as much as 9%. Since Trump's war in addition to the 13%. That they'd been up. Since the surprise election of president trump so if you not just a pipeline. Our company but do people actually build beast things yeah. They have gotten the biggest bump from us. And even pipeline operators are up significantly and by the way that's something we compared to oil and gas producers as oil and gas producers. Are up 13%. The S&P 500 is up 8%. Since the election these guys erupt you know twenty to 25%. These are big increases. Paul Amazon gets itself. In everything. Yeah from groceries to I mean just everything that trend that trend to be involved and everything looks like they're getting involved in an area. That we've seen a lot of growth in auto parts explain why Amazon is getting involved that what that might mean. I have an easy answer for you can oral part retailers. Have enjoyed 22 to 33%. In annual returns. Compared to 14%. For the broad market in the last five years does that answer the question Amazon's is that number they do want a piece yes there's there looking at that same that is one lucrative market that's a distributing marketing were very good at distributing items can sign us up. Now what's interesting though is analysts are unified as to whether or not Amazon can succeed here what's the biggest our reason for that. Well it bear first of all there's heavy service component to what these auto parts retailer still right you go when you talk to the guys is this really the right thing from what I need. And also same date requirements. You know can I need typically are working on a car eagle when you say can I get that thing. That's the beauty of being a retailer if you're. Either way this is going to be a very interest in play for our for Amazon. If I weren't auto part retailer I wouldn't welcome them into the space on the same side they did those retailers do have some kind competitive advantages. It's going to be interest. Polyps again. A week full of good information and so if we really need to know and there are remind folks in your telephone number eighty 972752680. 8972. Plan. Well we'll see you next week enjoy your week it's a plaster our financial for this just. All Parsons president of planned strong investment management. And you're listening to them plans strong financial forum on WR KR plus news talk stations. If you like what you hear on our show and what needs to take a look at your investments and retirement plan called my office. 80889727526. That's 888972. Plan. Securities and investment advisory services offered through an extra to prevent the birth and as I can sequester investment management and filling them a special group thinks is located at any Russian diplomats who sit on strong investment management is located at 980 Washington street Dedham mass 0226. 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 -- SIPC -- investment management has not affiliate in its financial grouping 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.