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Navigating Tariffs, Tech Trends, and Global Markets: Expert Insights from Paramount Wealth Perspectives - 3/10/25 · Paramount Wealth Perspectives

• 0:00
  Chris Coyle: Intro song
• 0:11
  Speaker 9: Hello, everyone.
• 0:12
  Speaker 9: Welcome to Paramount Wealth Perspectives, your go to podcast for the latest updates on global markets and current economic events.
• 0:20
  Speaker 9: This is your host, Chris Coyle.
• 0:22
  Speaker 9: I am the Marketing Director and Financial Advisor here at Paramount Associates Wealth Management.
• 0:27
  Speaker 9: And today I am joined by Scott Tremlett, Chief Executive Officer and Chief Investment Strategist at Paramount Associates Wealth Management.
• 0:35
  Speaker 9: Today we're doing it a little bit differently.
• 0:37
  Speaker 9: We've been listening to input from our community and we are striving to make this as educational to them as possible, including our clients who are the pillar of our community.
• 0:49
  Speaker 9: With that being said, we reached out to them, ask them to send us questions, which we're going to be going over today with Scott.
• 0:58
  Speaker 9: First question, that was.
• 1:00
  Speaker 9: Inputted to us was from a person who wanted to know, obviously about kind of the elephant in the room, tariffs how has that impacted the economy?
• 1:10
  Speaker 9: How is it going to impact the economy?
• 1:13
  Speaker 9: How has it impacted, if any, your investment strategy?
• 1:17
  Speaker 9: Thanks,
• 1:17
  Speaker 10: Chris.
• 1:17
  Speaker 10: Well, game on.
• 1:18
  Speaker 10: Let's tackle that elephant here right away.
• 1:21
  Speaker 10: Well.
• 1:22
  Speaker 10: So, generally speaking, as of now, there has not been an effect on the economy, but the perception of what's going to happen in the future is really what's driving the markets down here right now.
• 1:34
  Speaker 10: In general, markets don't like uncertainty.
• 1:38
  Speaker 10: And these tariffs and the reciprocal tariffs coming back at the United States are certainly a level of uncertainty that makes the markets uncomfortable.
• 1:47
  Speaker 10: Now, let's remember when it comes to tariffs and inflation to us as the consumer, this is a one time event.
• 1:57
  Speaker 10: Things will reprice.
• 1:58
  Speaker 10: So if XYZ product was 5 before with the tariff, maybe it's 6 and we can make the determination whether we're going to purchase that or not.
• 2:08
  Speaker 10: As of right now, we aren't seeing retail sales slowing and this was going into this year.
• 2:16
  Speaker 10: I have seen revenues in the predictions for revenues over the year for corporate America start to decline.
• 2:23
  Speaker 10: And so if tariffs start to eat into those margins a little bit further than even what we're seeing and what was projected going into this year, then at that point we could see a deterioration of earnings, stock market, and everything else to follow.
• 2:38
  Speaker 9: And Scott, in light of that and kind of continuing that line of thought, what would you, if any, have sort of a prediction for?
• 2:47
  Speaker 9: Year end for the market.
• 2:49
  Speaker 9: Well,
• 2:49
  Speaker 10: going into this year, and I don't think I've really changed my tune on this.
• 2:53
  Speaker 10: I really expected the S& P 500 to end the year up maybe 4, 5, 6%.
• 3:01
  Speaker 10: And that's really just looking at what we've gone through the last two years.
• 3:04
  Speaker 10: The last two years, we've had robust growth.
• 3:06
  Speaker 10: We've had robust earnings.
• 3:08
  Speaker 10: We've had robust growth in terms of the stock market.
• 3:12
  Speaker 10: And that's all fine and dandy, but when it comes down to it, Valuations in the United States are pretty high.
• 3:19
  Speaker 10: So when I'm doing my rankings around the globe, first I start with the growth factor, two sides of that current, and then there's momentum.
• 3:27
  Speaker 10: But secondly, I start to weight that versus what areas of the world are undervalued based or unearnings and what areas of the world is a monetary policy helping out those economies instead of trying
• 3:41
  Speaker 9: to slow the economy.
• 3:43
  Speaker 9: I got you.
• 3:44
  Speaker 9: And I think, as you mentioned, a lot of there was a lot of growth 2022 2023 driven by tech industry.
• 3:51
  Speaker 9: Certainly a lot of industries.
• 3:52
  Speaker 9: One of our clients had a question asking about AI.
• 3:56
  Speaker 9: And I guess the tech industry in general, what long term risks do you see?
• 4:01
  Speaker 9: What opportunities do you see?
• 4:03
  Speaker 9: How has it changed this year?
• 4:05
  Speaker 9: And how is it, you know, shaping overall in your investment strategy?
• 4:08
  Speaker 10: Well, I mean, going into this year, you know, certainly AI is going to be with us going forward.
• 4:14
  Speaker 10: And there's going to be a lot of money spent on AI.
• 4:17
  Speaker 10: Now, there's a couple different ways to play that.
• 4:20
  Speaker 10: One would be the chip makers themselves, NVIDIA's, Qualcomm's.
• 4:24
  Speaker 10: Broadcoms, things of that nature, but then also you can look at how, how is the infrastructure going to be built to house those chips, keep them cool, things of that nature.
• 4:35
  Speaker 10: So I was going into this year.
• 4:37
  Speaker 10: I looked at utilities as an area where you could get some growth characteristics, and there's two sides to utilities in my mind.
• 4:44
  Speaker 10: One is that cheap, defensive.
• 4:46
  Speaker 10: Pay a dividend, don't move very much, kind of move just based on rates.
• 4:50
  Speaker 10: And then there's the other side, which is the more aggressive, more growthy style of utility, like a talent energy or something of that nature, which they're expected to benefit from this AI world.
• 5:02
  Speaker 10: I think that the biggest risk is that everything is priced in already.
• 5:08
  Speaker 10: And that everybody's in on the same stuff and what happens when that happens and everybody starts selling is what we have days like today.
• 5:16
  Speaker 20: Yes, today definitely hurt for quite a bit of investors.
• 5:20
  Speaker 20: And is a good example of how a mass exodus can occur.
• 5:25
  Speaker 20: When everyone is invested in the same stocks.
• 5:28
  Speaker 20: Moving on to another question from a client.
• 5:30
  Speaker 9: What, given the current Climate that we have at home and abroad.
• 5:35
  Speaker 9: What have you been doing for investment strategy?
• 5:38
  Speaker 9: I know you mentioned in your, one of your latest updates on our website that you believe that international stocks are undervalued.
• 5:47
  Speaker 9: Can you please explain a little bit more about that?
• 5:50
  Speaker 12: Yes, Chris, going into this year, U.
• 5:52
  Speaker 12: S.
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  Speaker 12: stocks were definitely undervalued.
• 5:55
  Speaker 12: Normally, U.
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  Speaker 12: S.
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  Speaker 12: stocks trade at about a 20 to 40 percent valuation premium over non U.
• 6:00
  Speaker 12: S.
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  Speaker 12: stocks.
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  Speaker 12: However, the valuation going into this year was closer to 70 percent.
• 6:06
  Speaker 12: So that's a couple standard deviations further in terms of valuation premium than normal.
• 6:11
  Speaker 12: Really, it's driven by strong corporate earnings, momentum in global markets, more aggressive than expected Chinese stimulus, and global economic boost driven by central bank easing.
• 6:22
  Speaker 12: You know, when I look at my ranking, when I look at the globe, some of the things that I'm looking at is growth.
• 6:28
  Speaker 12: Yes, that's one factor.
• 6:30
  Speaker 12: I take in consideration retail sales, all sorts of different things, manufacturing services, leading economic indicators.
• 6:37
  Speaker 12: But then on top of that.
• 6:39
  Speaker 12: I really tilted the number in terms of the ranking either way.
• 6:43
  Speaker 12: One would be a reason would be valuations.
• 6:46
  Speaker 12: Are things cheap there?
• 6:47
  Speaker 12: And secondly would be more monetary policy.
• 6:50
  Speaker 12: Is the central bank helping the country or is it trying to slow the country?
• 6:55
  Speaker 12: And really that was a big change in this first quarter for me is moving away from More emerging market, India.
• 7:02
  Speaker 12: I love India.
• 7:03
  Speaker 12: Don't get me wrong.
• 7:03
  Speaker 12: It's still the strongest economy in the world.
• 7:06
  Speaker 12: Still number one in my ranking, but there are times where there's big headwinds and things just aren't investable.
• 7:13
  Speaker 12: So I think that they're kind of guilty by association with China right now.
• 7:17
  Speaker 12: And really the glowing star so far this year has been Europe.
• 7:20
  Speaker 12: Believe it or not is very rare in the last 25 years that I've talked about Europe as a great investment opportunity, but it certainly is this year.
• 7:29
  Speaker 12: And I've, I've Picked up European stocks.
• 7:31
  Speaker 12: I picked up that exposure and I've taken a break on India and certainly I'll come back to that.
• 7:38
  Speaker 13: And one last question for you, Scott, is I know you've mentioned the dollar strength and how that has been something that's been quite strong in the United States.
• 7:47
  Speaker 13: Is that something that you see going forward?
• 7:50
  Speaker 13: How would the tariffs affect that?
• 7:51
  Speaker 13: Just wanted to hear your thoughts on that.
• 7:53
  Speaker 15: Yes, Chris, in many ways, the U.
• 7:55
  Speaker 15: S.
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  Speaker 15: dollar has remained overvalued for some time, but economic growth differentials between the U.
• 8:01
  Speaker 15: S.
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  Speaker 15: and other major economies continue to support the dollar.
• 8:04
  Speaker 15: And really, typically, when a central bank raises interest rates, It then attracts foreign capital, strengthening its currency.
• 8:15
  Speaker 15: However, when the central bank cuts rates, investment returns become less attractive and the money leaves those type of currencies.
• 8:23
  Speaker 15: And this is an interesting place as an asset allocator right now when determining, A, I'm going to go buy Europe.
• 8:30
  Speaker 15: Okay, do I do it in dollar terms?
• 8:32
  Speaker 15: Or I do it in Euro and what I'm going to be looking for is which of those currencies is going to appreciate versus the other.
• 8:40
  Speaker 15: Because one, yes, you'll get the performance of the basket of stocks, but on top of that, you get the movements in currency and that can be advantageous or disadvantageous depending upon what side you are on.
• 8:53
  Speaker 15: You know, I can go on and on and on on these type of things, Chris, but I think we'll leave it here.
• 8:57
  Speaker 15: So we have something to talk about next week.
• 9:00
  Speaker 16: Well, yeah, thank you, Scott.
• 9:01
  Speaker 16: I know I appreciate your insight.
• 9:03
  Speaker 16: I know our community appreciates it.
• 9:05
  Speaker 16: And I just wanted to take the time now to Send a thank you to our community for sending in these questions.
• 9:11
  Speaker 16: We are eager to answer and continue to educate our community as much as possible.
• 9:17
  Speaker 16: So please continue to send in those questions.
• 9:20
  Speaker 16: You can send them to general at paramount a s s o c dot com.
• 9:26
  Speaker 16: Thank you all for listening and tuning in this week.
• 9:29
  Speaker 16: We will be back next week and look forward to answering your questions.
• 9:33
  Speaker 16: Thank you all.