Joining me now is Jimmy Lee CEO of the Wealth
Consulting group. Jimmy. It's been a while.
It's great to see you stocks down today. How
should investors navigate this market? Good afternoon, Kristen
. Thanks for having me on. You know,
today I think is just a little bit of profit
taking from, uh, a pretty good first two
weeks of the year for the stock market. And
today bad news for the economy ended up being bad
news for, for stocks, but I'm not sure
that's gonna continue to play out that way. And
so I think it's actually a good sign that,
you know, because I think the biggest factor in
determining when we're going to shift to a more of
an upward trend on the volatility side where stocks are
trending upward all the time will be, you know
, what the fed is going to do. And
I know that there are some mixed messages from the
different fed members about, you know, raising rates
and how aggressive they want to be. But I
think that we've had a decent chance now that by
the end of the first quarter, we could have
the fed pausing and if that's what happens between now
and then I would expect that stocks bonds and real
estate, a lot of different asset classes will perform
better by then. Ok. Interesting. So a
bit of a relief rally I think is what we
saw last week, Jimmy, as you were alluding
to there. And I've been talking a lot about
the inflation data that we got this morning, but
I think you rightly point out some disappointing retail sales
number. I mean, what should investors prepare themselves
for in terms of the volatility that we might be
seeing over the next weeks and months? Well,
certainly the higher interest rates has affected not just the
consumer, but I think also business activity with deals
getting delayed because higher interest costs. And so,
but I think the consumer is still strong. I
know that the retail number was softer, which is
good. I mean, the fed is looking to
look at the data and to see that the,
you know, the tightening has worked and we're starting
to see it. And so we're starting to see
inflation come down down in a lot of areas.
And the only area that didn't look very well was
was housing, you know, shelter and, and
I've said this before, I think on your show
that the way that the B L S takes that
data is with the rear view mirror. Uh Jeremy
Siegel has been talking about it for months. I
agree with him. And once once those numbers get
into the data, it's gonna look a lot better
. It's 40 per housing is 40% approximately, of
course C P I and now we're approaching, you
know, fed funds rate close to, you know
, core C P I inflation numbers. And so
I think we're at a point where the fed can
hopefully relax a little bit and give investors more enthusiasm
. And now we're starting to see a shift from
the consensus, just a few consensus just a few
weeks ago. We're definitely going to be in a
recession. Just not sure how deep to maybe we
get a soft landing and I'm hearing the same people
now talking about maybe avoiding a recession. So I
think that's all good news. Ok. So let's
talk about what might be some winning bets here,
Jimmy, how should investors be thinking about allocating their
portfolios during this time? Well, certainly, I
think everyone should look underneath the hood at their asset
allocation and make sure that they have exposure into the
right areas. Uh Currently, we are still overweight
the value sector. So I'm talking about energy,
industrials, materials and financials still. But I think
that tech stocks, big mega cap, tech stocks
will catch a bid in the second half of this
year later on in this year, once the Fed
does stop raising. And I think that there is
even a chance that while most people believe that they're
not going to lower this year, including a lot
of the FED members. Speaking, I think there's
a chance that could happen because I believe inflation is
going to come down a little quicker than what a
lot of people are predicting. And so I think
you want to have exposure, not just in the
value sectors that have been performing really well recently in
2022, but also making sure that you've got exposure
into the growth sectors that will catch a bit later
on in the year. And and beyond that also
, I think investors need to look at their holdings
and allocation in international stocks. I think with China
reopening, I think that ends up being a net
positive story for the global growth in terms of economic
growth worldwide. And I think that, you know
, international stocks will do well as a dollar probably
pulls back a little bit, you know, going
forward and so making sure that investors have enough of
that. And I think also while 2022 was a
really rough For a lot of investors because bonds were
off so much. I also think bonds are a
great place to have your money. So I think
overall while I think that there's still a lot of
pessimism out there, I think 2023 this year,
it could end up being a pretty good year for
investors. OK, Jimmy Lee, we got to
leave it there. Always a wealth of knowledge,
we appreciate you joining, Jimmy is the ceo of
wealth consulting group.