Fiduciary's Andersen: US Market Still Best Game in Town (Audio)

do you value the stock market right now? And generally, I mean, what are some of the key metrics? And do you think that investors are paying too much for the earnings that they're currently receiving. Well, you know, normally I would give you a rational answer to that, Pim, but I think what's happening now is, uh, things seem to be trading far more on feelings, hope rather than logic. And let me explain. I think there's a ton of

uncertainties out there. I mean, we always can point to something, but now we seem to have such a confluence of uh, really worrisome factors. I mean, let's just tick them off right. The election outcome. Banks are in the forefront now, Deutsche Bank, and well as far ago, you've got the Fed always wondering, you know, we're wondering about their raising rates. You have Brexit, the jobs number tomorrow, which is less an extent the

jobs number. But in general, you have all these uncertainties and they're kind of combining in a time that is really unfortunate for analysts because it's so hard to make any predictions on any of those things right now. Well, it's understandable then to why people are, you know, eager to keep buying stocks. You gotta get you're gonna return someplace. Yields are low in fixed income. At the same time, it's just the same thing happens to the Fed. It's

happened for but three or four years. Every time they're ready to really make a move, something happens. Brexit happens with the Chinese stock market just plunges. And I guess, if I'm an investor, that's what I'm I'm gun shy, Yeah, I would say, but the best way to approach being gun shy at this point is to be fully diversified. I mean, I know that's a trite phrase, but it really does come into play when you have so many uncertainties.

You know, normally I think we can handle oh, probably two or three, but when you start getting four or five, six, I think the best of modelers out there just cannot really factor that in. And you can either stay on the sidelines and risk market timing, or you can go full steam ahead or maybe turned back a little, but not stay on the sidelines, because there is just no

way to call things like this election. Even tell us a little bit about some industry groups if you don't mind, because the election and politics can play a role in the valuations that investors give, for let's say, the healthcare industry. Absolutely, and you know him. I think the other thing is, uh, it's so difficult this time around because when you look

at both candidates, Uh, it is truly. You know, the metrics we've used in the past to predict presidential victories, I'm not sure how applicable they are in this case, because this might go down in history as one of the most disliked, unenthusiastic elections we've had. I've heard anecdotal stories about there are no lawn signs on anybody's lawn, bumper stickers, etcetera. You can see a lot of that in our nation, which is indicative of the fact that

there's not a lot of enthusiasm. So when you try to use general common sense principles, for instance, healthcare, you know, we've always heard that calculus that, uh, if Clinton is elected, uh friend of healthcare, etcetera. But I'm not certain that we can go that far at this point because it doesn't seem like there's a convergence on who will actually

be winning. So, Peter, what should I do? I mean, if everyone's gun shy uh and and and if if some individual companies will continue to grow, you know, because they are, they're they're luckier, they've got a great busines, whatever it is, what do I do if I'm I don't want to stop investing, I'd like to make some money. Well, first, I think the the US stock market is probably the best game in town, right, especially if you're looking at

say mid or small cap companies. Let's just figure that the reason why that would be attractive is that it doesn't have off overseas exposure. The product lines are usually ring fenced within the United States. The consumer, for all the gnashing of teeth we've we've mentioned on these programs about as a consumer up or down or sideways. I would say the consumer is growing okay and sentiment is okay.

So if you tie into that, you probably want to buy stocks that are in the mid and small cap space because the US exposed to international pressures and currency for instance. Make a You make a good point, is there is there a different Do you look at the

valuations differently for a small or mid cap stock? I think in this case, you know, it always depends on the situation in that hand and excuse me, And in this case, I think you do because you have to look at the relative attractiveness of say large multinational companies in the risk of y're opening yourself up to with that currency risk, etcetera. Interest rates off their rays. How

does that impact currency and those divisions? Whereas a small a mid cap maybe there isn't more of a premium because it's uh, I don't know, coin of phrase, it's an analyze herble. You know, the the capability for it to be analyzed is better. Therefore, maybe it demands a higher premium because you can understand it easier in this environment. So, uh, what about just the your your your macroeconomic outlook. You've got about twenty seconds left. And is it going to

be strong enough to support the stock market. I think the U s it will, but I think Bregxit we have a long long way to go. People are not focusing enough on the fact that it might take two to four years for us to figure out how Brexit is going to play out, let alone how it's going to impact stocks, say in the next six months. Therefore, stay a long term investor. All Right, Peter Anderson, thank you so very much for joining us today on taking stock.

He's chief investment officer at Fiduciary Trust in Boston. Well, we're almost there. The market closed. That means our Stocks editor Dave Wilson will be back to join us for the movers and shakers. Stocks narrowly mixed, but within that you've got some stocks that are really making some moves. This is Bloomberg