Richard Saperstein
speaker
29 appearances
1 recordings
1 series
first heard Dec 2018
last heard Dec 2018
Richard Saperstein’s voice in public audio — every appearance, attributed to the second.
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Appearances
Well, I think it's important to look ahead as to what changes could occur in the environment and gather information that help you plan accordingly.
So that would be assembling account documents and being able to determine an overview of your asset allocation.
In addition, it's important to understand what the interest rate is that you're paying on your potential home mortgage.
and to determine if there's any changes or resets in that interest rate.
Other than that, you'll need your standard accounting documents for your tax advisor, but it's important just to be ready for what's going on in 2019.
Currently, we're avoiding emerging markets as well as a very low exposure to international developed market equities.
The reason for that is because of Fed quantitative tightening, where they're basically pulling back the liquidity that they've put out post-crisis.
And that's causing a lot of agitation amongst non-U.S.
markets that have to gain access to dollars.
The biggest surprise has been the real fundamental strength in the economy, leading to tremendous jobs growth, strong economic conditions, and increased earnings that have been way above expectations.
I don't believe that people pay attention to Fed actions and the impact that the Fed can have on the stock and bond markets.
As a result, people with fixed income portfolios should pay closer attention as to what's going to occur with interest rates and the ultimate impact on their bond portfolios.
In addition, it's very important to speak with your advisor to identify what, if any, changes should be applied to the equity side of your portfolio.
Investors must realize that following the crisis, the Fed and global central banks have pursued very unorthodox and aggressive monetary policies to stimulate economies.
That resulted in zero interest rate environments, as well as central banks purchasing large amounts of securities and injecting tremendous amounts of liquidity into the system.
Now, post-crisis, we're in a very strong recovery, and global central banks, specifically the Fed, are now reversing the thrusters on that global flow of liquidity.
So as that money now reverts back, either through quantitative tightening or allowing bond purchases to roll off, as well as rising interest rates in the way of increasing Fed funds,
That's going to cause friction in various markets.
It's very important that investors always have some safe, dry powder in their portfolios by way of safe assets to take advantage of any market dislocations that might occur as a result of these very structural changes.
I would have very high-grade short-term bonds in the portfolio as well as some money market funds.
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