Fox Business Asks Lee Munson Why Markets Thrive

Portfolio Wealth Advisors CIO Lee Munson was asked to appear on top ranked Fox Business show, Countdown To The Closing Bell. Ashley Webster, guest host filling in for Liz Clayman, asked Munson why the markets continue to surge despite a disappointing 1Q GDP report. Click on the link here.

Lee makes the following points:

1. Investors are moving shares forward, or merely sideways over the last few months in anticipation of tax cuts for corporations. This will immediately increase profits.

2. We don’t know if the short-term effect of tax cuts will translate into increased corporate spending and investment in people and equipment. That is the uncertainty that only time will reveal.

3. Don’t focus on dividends, focus on great companies and asset classes that you can buy at a discount. Usually those parts of the market already pay great dividends.

4. From cloud computing to advanced manufacturing, focus on profits.

5. History has shown that stocks that sell for less than their peers have higher performance than overpriced garbage. 

Don't Fight the Tape!

There is an expression in our business - "Don't fight the tape"!

So, while it was a surprise to some, we ended Q1 on a positive note. This sets a tone for the rest of the year from a momentum standpoint.  Keep in mind though that the wide variety of potential policy outcomes will cause uncertainty for the year. Uncertainty may result in increased volatility and can provide opportunities for buying on dips and selling into rallies.  Global equities and inflation-resistant assets should do well, but a tilt toward smaller capitalization stocks both home and abroad are merited at this point in the business cycle. This is a time to keep a sharp eye on the ball for both opportunities and for protection.