Let's get to our guest, Loreen Gilbert's CEO of Wealthwise Financial. Well, it's a complex marketplace out there. We've had this huge drop in the stock market and then the bond market, and people are looking for bottoms. It seems like you're attracted here to high quality investment grade bonds. And so if we if we look into credit like this UH and into some of the ways of getting exposure, the e t F l q D is one we can focus on. It's dropped from just over one thirty to
just over one. So if you buy this now, you've already taken I mean, we've had a lot of pain there. You're now expecting that that will have yields coming down sometime soon. Lorie, Well, I think when you look at the bond market in general, there's going to be a reversion to the to the mean, and so right now
there is an opportunity in fixed income. And what I would say the opportunity is to start with quality you know, treasuries, and then go down the credit chain there and be being more careful keeping it on the quality side, because as the economy deteriorates, if we continue to see a deterioration of the economy. You know, right now, still economic
numbers are good. But if we start to see a deterioration, then of course we know that the areas of the credit will be affected more than your in your quality side of things. But we do see in a sense decade long opportunities in fixed income for people who are
looking to add cash and want to keep it conservative. Well, absolutely, and you look at this, and you look at two year yields at four point many four point three, I mean that represent value surely and also safety, right and I think that you know, for a lot of people looking to deploy cash right now are looking and saying, you know, as we're heading close search to a recession, then farther away from it, where do we put our resources? And my answer to that would be to stick with
value oriented equities that are divid in paying stocks. And then looking at the fixed income opportunity where we've seen such a draw down. Do you like a mix of because you talked about a mix of fixed income, you know, including sovereigns and credit, Uh, what about muni's? Do munies look pretty good here, particularly given the tax free nature. Absolutely, I mean municipal bonds have been hit UH incredibly hard
year to date. And yet when we look at UH, the credit quality of these municipalities, their flush so around the country, these are municipalities that are going to pay their debts. So absolutely, municipalities are a great opportunity tax nature as well. You know we've got this aggressive FED, that we've got the possibility of a recession. Well, to begin with, how indeed, what are the chances of a
recession this year and next? And secondly, how much pain do you think the FED is willing to place on the US economy? Well, the set is definitely talking tough, and what they're doing is saying that they're going to be tough going forward. And if you believe what they're saying, then certainly it's going to be hard to hit a soft landing. And they've stopped even talking about a soft landing, which indicates they're willing to go to a hard landing.
So certainly that means a recession. And so the big question is do we believe what the FED is saying or in fact, are they going to talk tough and hope that things somewhat slow down and inflation starts coming down and then they can then pause. So you know, I don't see a recession in two and and it's it's very unlikely in two and even right now if you look at what's kind of been priced in the
chance of a recession twelve months out. But having said that, I think the likelihood of a recession in late is very probable. So that makes it a difficult time really to get aggressive and probably even to to do a lot of buying in the equity markets. Um and and particularly you started off with talking about investment grade corporate bonds. Uh, is it likely that we're going to see a pretty sharp revision down of earnings expectations over this next period.
I think we're already seeing that from analysts, and I think we're going to continue to hear that. And the question is do earnings just go off the cliff or is it just you know, that you know, continuing to slow down. I do think though, that it is an opportune time to overtime time be purchasing in equity, So
we are seeing opportunities there. So we certainly do see some opportunities that I think, um, you know, people could take advantage of, but certainly on the more defensive, cautious way, And I think for investors to be thinking about that, their opportunities right now and taxable accounts would be to take tax loss harvesting. And if in their retirement accounts they're gonna they're gonna want to hold longer than doing too much of selling because you're not going to get
any kind of tax advantage. There. Tell me something here as well, when you if you took your views as a month ago to what they are, how would they have evolved. That's the first part of my question. And secondly, do you think that the merchants have doomed for Europe over egging it? Right? So we certainly have changed our stance, and that is that's changed along with the Feds States.
You know, really Jackson Hole was a pivot and ever since then, you know, to take them seriously as far as what they're saying, UM would mean that we need to be more concerned about this hard landing idea, and so yes, I would say that we have pivoted as well to being on the more cautious side preparing ourselves for a potential recession. Having said that, I would also say that not all recessions are created equally, and we
are not expecting a severe recession. And that's why I say that even through this trough, we see opportunities that I think people can take advantage of. And then to your point about Europe, I do think somewhat it is potentially over overdone. And although this nord Stream pipeline is is another big issue and that's the latest news, but without what we heard is that Italy is prepared for the winter. And so you know, the question is, you know how many countries are in fact they've been preparing.
Maybe they're more prepared than we think they are. Yeah, but you've just outlined you've got a slowing US economy, a slowing European economy, and a slowing Chinese economy. Well that's a that's kind of I think we're out of time. I don't think we can really go into this, but you know, it paints a pretty nervous picture out there. Loreen, thanks very much,