Latest / Best of Business / Sam Dickie: Fisher Funds expert explains the investing environment six months into 2024

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Sam Dickie: Fisher Funds expert explains the investing environment six months into 2024 · Best of Business

• 0:09
  Speaker 1: You're listening to a podcast from News talks'd be follow
• 0:12
  Speaker 1: this and our wide range of podcasts now on iHeartRadio.
• 0:17
  Speaker 1: Heather Dupless Tendebraders with.
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  Speaker 2: Us in just about ten minutes time. We're thereabouts. Now
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  Speaker 2: we're almost halfway at the at the halfway point for
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  Speaker 2: the year. Of course, question is how different is the
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  Speaker 2: investing environment now versus the start of the year. And
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  Speaker 2: to answer that question, we have Sam Dickey Offisher Funds
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  Speaker 2: with us.
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  Speaker 3: A Sam, Heather, Now, are you so very well?
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  Speaker 2: Thank you so remind us of the economic backdrop and
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  Speaker 2: the investing environment as we started the year.
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  Speaker 3: Yes, So if we look at it through growth the
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  Speaker 3: lenses of and growth, inflation, interest rates, and equities to
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  Speaker 3: set up on January one was the market was still
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  Speaker 3: pretty cautious about US economic growth, for example, so they
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  Speaker 3: are only forecasting a poultry one percent growth for the year.
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  Speaker 3: Inflation had been tamed but not completely conquered. So global inflation,
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  Speaker 3: you remember back in the day it was at a
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  Speaker 3: high of ten percent, and it was at about five
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  Speaker 3: and a half percent at the start of the year.
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  Speaker 3: Bond investors had a slightly better year in twenty twenty three,
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  Speaker 3: so that they were feeling a little bit less grim
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  Speaker 3: after the worst year in one hundred and fifty years
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  Speaker 3: the year before, but still nothing to write home about. Men. Finally,
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  Speaker 3: on the share market, those investors were feeling pretty good
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  Speaker 3: about life as they entered twenty twenty four. Remember the
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  Speaker 3: strong rebound in equity markets in twenty twenty three, and
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  Speaker 3: within that, remember the twenty twenty three stock market performance
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  Speaker 3: was driven by a narrow bunch of stocks, and I'm
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  Speaker 3: sure you remember the magnificent seven Heather, Yeah, totally.
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  Speaker 2: What does the backdrop look like now.
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  Speaker 3: Though it's shifted a bit so through those shame the
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  Speaker 3: same lenses. The US economy has just surprised positively all year,
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  Speaker 3: so economists are now expecting two and a half percent
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  Speaker 3: growth for that all important economy, up from that one
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  Speaker 3: percent initial forecast. Global inflation has fallen a little bit further,
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  Speaker 3: but still not fully wrestled to the ground. Bond investors
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  Speaker 3: are still waiting for their day in the sun, and
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  Speaker 3: returns are approximately flat and shar market investors are enjoying
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  Speaker 3: another solid six months. So global equities are up twelve percent,
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  Speaker 3: but there is one little wrinkle, hitter, So you and
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  Speaker 3: I talk back in March and April about the nice
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  Speaker 3: broadening out of the stock market rally after that very
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  Speaker 3: narrow rally in twenty twenty three, which was funny enough,
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  Speaker 3: correlated with that nice continuous positive surprise in the US
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  Speaker 3: economic growth. Well right now that US economic growth is
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  Speaker 3: still solid, but it's no longer accelerating, and the stock
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  Speaker 3: market rally is again really really narrow, so it's only
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  Speaker 3: been driven by less than a handful of stocks now,
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  Speaker 3: So Google, Apple and n Video.
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  Speaker 1: That's interesting.
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  Speaker 2: Remind us of the themes we've seen. What are the
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  Speaker 2: investments that are working and what are the ones that
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  Speaker 2: are not.
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  Speaker 3: You and I've talked about it most of them, but
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  Speaker 3: if we just picked three over the last six months
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  Speaker 3: we've talked about so you and I talked about how
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  Speaker 3: Google and Apple were considered AI laggards or losers, which
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  Speaker 3: seemed absurd, and the lesson there is when high quality
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  Speaker 3: companies are called losers, investors should basically pay attention. The
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  Speaker 3: second thing is we talked about how commodity prices and
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  Speaker 3: doctor Copper and particular is a really good barometer of
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  Speaker 3: the health of the economy, and incidentally that price has
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  Speaker 3: fallen a bit lately after a very strong run earlier.
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  Speaker 3: And the other thing we talked about was how geopolitics
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  Speaker 3: are of course sad, and elections garner a heck of
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  Speaker 3: a lot of headlines, they typically don't derail long term
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  Speaker 3: stock market investors.
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  Speaker 2: Why I mean, SAM, isn't normal for a backdrop to
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  Speaker 2: change so much.
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  Speaker 3: It's not It's not normal. And if you look back
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  Speaker 3: over say the last twenty years or so, and if
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  Speaker 3: we used analyst forecasts of US GDP for the year ahead,
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  Speaker 3: normally those forecasts will move around by maybe half a percent,
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  Speaker 3: maybe a percent until they land on the final actual number.
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  Speaker 3: So that sort of think about that as forecasting era.
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  Speaker 3: Since COVID analysts are having a nightmare forecasting US and
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  Speaker 3: global GDP growth, so the difference between the initial forecast
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  Speaker 3: and that final number can be as wide as two
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  Speaker 3: two and a half percent, so three to four times
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  Speaker 3: the normal forecasting era.
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  Speaker 2: What does that mean for investors?
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  Speaker 3: I think it means you stick to your knitting, so
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  Speaker 3: you take a really long term view and you invest
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  Speaker 3: in high quality, long term growth companies, and you shouldn't
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  Speaker 3: normally be swayed by macroeconomic forecasts because they're normally wrong,
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  Speaker 3: but especially so now in a post COVID world.
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  Speaker 2: Yeah, brilliant advice. Thank you very much. Sam appreciated it
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  Speaker 2: as always. Talked you again next week that Sam DICKEYFS
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  Speaker 2: your funds.
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