Latest / Merryn Talks Money / Go International, Benefit From Volatility, and Other Tips for Investing $100k Right Now

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Go International, Benefit From Volatility, and Other Tips for Investing $100k Right Now · Merryn Talks Money

• 0:02
  Speaker 1: Bloomberg Audio Studios, Podcasts, Radio News. Welcome to Maren Talks
• 0:17
  Speaker 1: Your Money, the personal finance edition of Merin Talks Money.
• 0:20
  Speaker 1: In these bonus podcasts, we talk about the best strategies
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  Speaker 1: for making the most of your money. I'm Maren Sunset Web.
• 0:26
  Speaker 1: This week we bring back old friend of the show,
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  Speaker 1: Susanne Willie from our personal finance and investing team. Suzanne,
• 0:31
  Speaker 1: welcome back.
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  Speaker 2: Thanks, good to be here.
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  Speaker 1: Right now, we are looking at a piece you've written
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  Speaker 1: about how to invest one hundred thousand dollars right, Yes,
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  Speaker 1: and it's real money.
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  Speaker 2: Yeah, if only I had it to invest, I'd be
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  Speaker 2: very out. Have lots of ideas here, yeah, I.
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  Speaker 1: Mean, I like the idea of looking at this and saying,
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  Speaker 1: what happens if you suddenly have an extra hundred thousand dollars,
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  Speaker 1: Because we're assuming, aren't we when we look at this stuff,
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  Speaker 1: that the people who are reading this already have money
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  Speaker 1: invested in the market. They're bringing in an thousand, and
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  Speaker 1: they're thinking about where it should go. And there's a
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  Speaker 1: big change in the way the people who you speak
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  Speaker 1: to respond over the last couple of years. And you know,
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  Speaker 1: back in the old days, when you talk to people
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  Speaker 1: about any amount of money. It would just be about
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  Speaker 1: which part of the American market to put it in. Right,
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  Speaker 1: And now the mantra is diversified, diversify, diversify. One of
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  Speaker 1: the people in particularly you spoke to this week, the
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  Speaker 1: first thing he said was diversified, diversified, diversifyer right, It's
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  Speaker 1: so true.
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  Speaker 2: I mean months ago it was like Mag seven, you know,
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  Speaker 2: a MAG seven, Buy more Mags seven, full war. Why
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  Speaker 2: would you do anything different, you know, go all in,
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  Speaker 2: you know, but that is I think those days are
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  Speaker 2: largely gone. I mean the people now are much more,
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  Speaker 2: much more cautious tone, and a lot of them are,
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  Speaker 2: you know, spousing what is a really smart move, which
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  Speaker 2: is to diversify internationally. You know, this is like age
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  Speaker 2: old advice. You know, we all know if we study
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  Speaker 2: our personal finance history, that diversification is really important. You
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  Speaker 2: should have a good chunk of your money overseas. But
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  Speaker 2: that has been obviously ignored for years, at least here
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  Speaker 2: in the US, because of the mania around the MAG seven.
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  Speaker 2: And we did have one person this time, Victoria Fernandez
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  Speaker 2: of Crossmark Global Investments, who did mention a MAG seven stock.
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  Speaker 2: She mentioned Microsoft, but she also noted that she would
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  Speaker 2: only sort of maybe buy it on a dip right now,
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  Speaker 2: but most of the people had more of a cautious
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  Speaker 2: tone in tech was not a major play.
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  Speaker 1: Yeah, well, let's start with Victoria then, because she was
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  Speaker 1: actually the three that you into it. She was the
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  Speaker 1: only one that was really still very very US orientated, right, so,
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  Speaker 1: the Victoria Fernandez's chief market strategist at Crossmark Global Investments.
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  Speaker 1: And when you talk to her, she talked about moving
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  Speaker 1: into different parts of the US market as opposed to
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  Speaker 1: moving out of the US market.
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  Speaker 2: Yeah, she did. I mean, you know, in tech, she
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  Speaker 2: liked Cisco Systems. They are one of the few companies
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  Speaker 2: with a dividend, so she likes that as sort of
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  Speaker 2: a buffer. And she also likes the fact that their
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  Speaker 2: software business has been growing over time and has a
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  Speaker 2: higher margin and recurring revenues, which is always kind of nice.
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  Speaker 2: She liked insurance, and particularly Progressive Corp, which has seen
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  Speaker 2: property and auto lines increase policies at a rate of
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  Speaker 2: eighteen percent year over year. And I think importantly to
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  Speaker 2: her because she is still sort of cautious on the
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  Speaker 2: market to a degree, Progressive is less valid than the
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  Speaker 2: market as a whole. And then she also liked healthcare
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  Speaker 2: a lot. In Gilead Sciences, it has an HIV franchise,
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  Speaker 2: it's doing acquisitions, it has a you know, expanding its
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  Speaker 2: lines in business for oncology and liver disease, and it
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  Speaker 2: has a dividend. And if you look at what we
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  Speaker 2: sort of cannot avoid it is medical expenses. So unfortunately,
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  Speaker 2: that seems like the solid theme.
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  Speaker 1: Yeah, although you want to watch out for getting into
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  Speaker 1: names that have a lot of weeks to Medicare and
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  Speaker 1: medicaid in dis political environment.
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  Speaker 2: So true, we're in such a bizarre time. You know,
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  Speaker 2: there's so much that's in flux and so much uncertainty.
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  Speaker 2: And I mean, who knows what's going to happen with
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  Speaker 2: Medicare and Medicaid, social Security. We just don't know.
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  Speaker 1: Yeah, so stay clear of that. Okay. So the second
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  Speaker 1: person you interviewed this is Michael Rosen.
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  Speaker 2: Yeah, evangelists investments.
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  Speaker 1: And he's a diversified, diversify guy, and he's very clear.
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  Speaker 1: He says, you know, fifteen years ago, just but it
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  Speaker 1: told you to own large US tech stocks. I hope
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  Speaker 1: that he did tell everyone that. I hope they did
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  Speaker 1: follow his advice.
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  Speaker 2: Yes, that era.
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  Speaker 1: That era is very clearly done. New era, fragmentation, volatility,
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  Speaker 1: spread everything around the place.
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  Speaker 2: Yeah, he advises diversifying your geography. Is your currencies, your sectors,
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  Speaker 2: your strategies. You know. He made the point that the
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  Speaker 2: US represents more than sixty percent of the world's equities,
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  Speaker 2: but that is likely to fall. So he thinks you
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  Speaker 2: should have half of your equities outside the US, including Europe, Japan, China,
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  Speaker 2: and the emerging markets. And you will, like this, maren
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  Speaker 2: a small five percent allocation to gold.
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  Speaker 1: Excellent, well done in I mean, maybe a little more.
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  Speaker 1: But you know, everyone's getting with a program.
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  Speaker 2: Now, you know, no one's perfect Marrigan.
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  Speaker 1: And then he says, and I thought this is interesting
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  Speaker 1: as well. He says that for a twenty five year
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  Speaker 1: old investor, a someone who's got a very long time frame,
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  Speaker 1: they should be all in on equities, none of its
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  Speaker 1: bond nonsense.
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  Speaker 2: If you have a time horizon of for years, why not.
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  Speaker 2: I don't think he's saying put it. He's not saying
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  Speaker 2: put it all in the mag seven. But if you can,
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  Speaker 2: if you have forty years, you can ride out the cycles,
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  Speaker 2: and you can afford to take the risk. You know,
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  Speaker 2: if you're more my age, if you add a couple
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  Speaker 2: of decades onto there, he's like, well, you know, maybe
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  Speaker 2: a more balanced portfolio than we've been advocating for just
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  Speaker 2: even a couple of few years ago. But when you're young,
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  Speaker 2: you're like a bond and you have a lot of
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  Speaker 2: years stretching out ahead of you, and so you can
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  Speaker 2: afford to take more of that stock like risk.
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  Speaker 1: And then he had a really great idea for an
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  Speaker 1: alternative investment, which I would say counts this genuine diversification
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  Speaker 1: across the asset classes.
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  Speaker 2: Yes, he had the most original idea. I have to say,
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  Speaker 2: I don't know about the UK, but eggs have been
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  Speaker 2: an issue of the praise of eggs has been very high,
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  Speaker 2: and people are there's just like ridiculous amount of talk
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  Speaker 2: about the praise of eggs, and so he's like, well,
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  Speaker 2: you know eggs are still high, why don't you invest
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  Speaker 2: in See what hens might yield? He said, with one
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  Speaker 2: hundred thousand, you can buy four thousand egg laying hens,
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  Speaker 2: each producing about one egg a day. That's twenty eight
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  Speaker 2: thousand eggs per week. For about twenty three hundred dozen.
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  Speaker 2: You solament farmers market for ten dollars a dozen and
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  Speaker 2: that's twenty three thousand per week of revenue. You know, realistically,
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  Speaker 2: we're not going to k do that, Okay, I reckon.
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  Speaker 1: America's poultry farmers might have some comments to make there
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  Speaker 1: about labor costs and the cost of land and exactly
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  Speaker 1: the cost there sticking to the general regulatory environment around
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  Speaker 1: a care of chickens.
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  Speaker 2: Still he was not entirely serious with that.
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  Speaker 1: Well, nonetheless, it's good, good to think about why you can,
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  Speaker 1: why you can expand yourself exactly.
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  Speaker 2: It's that's true diversification, you know, really is right.
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  Speaker 1: And then you add eight. Third interview this week Jose Rasco.
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  Speaker 2: Yeah. Jose is the America's Chief Investment Officer for HSBC
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  Speaker 2: Global Private Banking and Wealth, and he is short termed
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  Speaker 2: neutral in the US and more positive on emerging markets Asia,
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  Speaker 2: noting in Asia and general economic growth is better. And
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  Speaker 2: he's really focused on this paradigm shift from globalization to regionalization.
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  Speaker 2: So he's looking at how China has moved a lot
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  Speaker 2: of low end manufacturing abroad to Vietnam, the Philippines, Sri Lanka, Mexico.
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  Speaker 2: He also has a modest overweight in Europe, particularly in
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  Speaker 2: Germany and in the sort of emerging markets area. He
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  Speaker 2: loves India, which I mean, we've heard about people living
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  Speaker 2: India forever because it's young population, a lot of productivity
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  Speaker 2: to come. But as he notes, like, we need them
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  Speaker 2: to open up their markets a bit more.
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  Speaker 1: And that's an expensive market. I mean, you know that
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  Speaker 1: the positive story is a really compelling one, but that
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  Speaker 1: is not a cheap market.
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  Speaker 2: No, he's sort of looking at the five to ten
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  Speaker 2: yure horizon in Europe. He's really looking at industrials, aerospace materials.
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  Speaker 2: This is, you know, a defense play to a big degree.
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  Speaker 2: So that's where he was at. And his alternate idea,
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  Speaker 2: we ask people what they would do with one hundred
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  Speaker 2: thousand dollars if they could do something fun, also fell
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  Speaker 2: on a theme because two of these people said they
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  Speaker 2: would buy a luxury Winnebago. I don't know if Winnebago's
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  Speaker 2: at least large RVT like silver bullet buses that you
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  Speaker 2: can drive across the country and park.
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  Speaker 1: No, we love them. I mean we don't have them,
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  Speaker 1: but we love them.
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  Speaker 2: Right now.
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  Speaker 1: You had one one last guy at Matt Melee.
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  Speaker 2: Yes, Matt Melee at Miller and to BAC and he
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  Speaker 2: is their chief market strategist, and he struck a crosshous note.
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  Speaker 2: He said he would put like ten to fifteen percent
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  Speaker 2: in cash because he feels we're like a key inflection
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  Speaker 2: point where it's going to be hard to push higher
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  Speaker 2: anytime soon, so he wants some dry powder if we
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  Speaker 2: get another leg lower. But the one area he really
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  Speaker 2: liked was interesting because he was saying firms like Blackstone
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  Speaker 2: and KKR, you know, in sort of the private market space,
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  Speaker 2: private equity and such, whose stocks were down forty percent
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  Speaker 2: at their lows. They haven't bounced back as much as
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  Speaker 2: the rest of the market, and he acknowledges that some
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  Speaker 2: of these stocks are having a rough time and it
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  Speaker 2: could get worse. But he feels like, how much lower
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  Speaker 2: can they go? And also, if we do slide into
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  Speaker 2: a unhappyer period in the markets, these are the firms
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  Speaker 2: that jump in when they're sort of blood in the streets.
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  Speaker 2: So his feeling is, you know, he wouldn't run in
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  Speaker 2: and buy them right now, but he feels that their
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  Speaker 2: stocks have already priced in a lot more than you
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  Speaker 2: see in the broader market, and so he would nibble
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  Speaker 2: at these stocks and dollar costs average into them over
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  Speaker 2: the next six months, so he would take you a
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  Speaker 2: very disciplined approach to averaging into them over time. He
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  Speaker 2: talks about Boeing, which is interesting because it's been such
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  Speaker 2: a loser for a long time, and his argument for
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  Speaker 2: Boeing is a long term one, and he's like, well,
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  Speaker 2: it's one of only two commercial airline makers in the world. Yeah,
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  Speaker 2: and it's important to the defense industry. And he's like,
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  Speaker 2: it's too big to fail, will always be rescued. But
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  Speaker 2: on the other hand, it being rescued may not always
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  Speaker 2: be good for shaholders. Not there's any reason for be
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  Speaker 2: rescued right now. But you know, I mean, yes, I
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  Speaker 2: take your point. But he thinks that Europe is building
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  Speaker 2: up defense a lot of American contractors will be part
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  Speaker 2: of that, and he feels like the stock is finally stabilizing.
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  Speaker 2: It's definitely a longer term play. His advice there is
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  Speaker 2: to buy a little bit once a month, every month
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  Speaker 2: of the year and sit on it for five years.
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  Speaker 1: He's a stuff guy, right, so in his alternate idea,
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  Speaker 1: he's not me. He does mention Winnebago's is as well
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  Speaker 1: renting one of those, but actually do you know here
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  Speaker 1: he is. He's saying that he'd go real estate realizated
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  Speaker 1: always good, and as she went in Detroit in the
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  Speaker 1: nineteen seventies.
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  Speaker 2: Of course he'd.
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  Speaker 1: Buy something in Mississippi, something in Alabama. And then he
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  Speaker 1: does exactly what we were just talking about. This guy
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  Speaker 1: would like to rent a Porsche. I know I'm not
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  Speaker 1: buying a push rent a Pusche. Okay, that's an experience thing.
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  Speaker 1: I'll give you that.
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  Speaker 2: I know that. I guess it is an experiencing thing. Yeah,
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  Speaker 2: he'd love to rent a Porsche and drive as fast
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  Speaker 2: as he could on Germany's Autobahn, which is a fantasy.
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  Speaker 2: I know a lot of car people have.
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  Speaker 1: The last car I drove as fast as I could
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  Speaker 1: on an autobarh was my little old MX five MIATI
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  Speaker 1: called manus. I don't really go that fast?
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  Speaker 2: How fast? How fa?
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  Speaker 1: The bit I'm gonna goes up to one hundred and
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  Speaker 1: eighty get launch it, and we certainly got it beyond that.
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  Speaker 1: But I reckon I could go a lot faster in
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  Speaker 1: a Porsche.
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  Speaker 2: How fast can you go in a Porsche? Is my question.
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  Speaker 2: I'm not sure.
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  Speaker 1: I don't know. I don't know. Listeners, let us know
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  Speaker 1: how fast you've been in your porch. In fact, listeners,
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  Speaker 1: here's the challenge. I want to hear from you. I
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  Speaker 1: want to hear from people who've driven as fast as
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  Speaker 1: they can on Germany's autobah, and I want to know
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  Speaker 1: who's gone the fastest.
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  Speaker 2: We're going to.
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  Speaker 1: Report on this next time, Suzanne, and we'll get together.
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  Speaker 1: We're gonna name the person who's gone the fastest.
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  Speaker 2: So let's do that, all right. I love that.
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  Speaker 1: Yeah, it won't be me, and it won't be Suzan,
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  Speaker 1: but I know it's one of you. Suzann, thanks so
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  Speaker 1: much for that. That was really interesting and incredibly useful,
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  Speaker 1: great ideas.
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  Speaker 2: Oh great to be here.
• 12:31
  Speaker 1: Thanks thanks for listening to this week's Marin Talk to
• 12:37
  Speaker 1: Your Money. If you like us show, rate review, and
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  Speaker 1: marinas w and John Underscore Stepping. This episode was produced
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  Speaker 1: Our show email is Merri Money at Bloomberg dot net