Welcome to Dr. David Eifrig's Health & Wealth Bulletin.
This is Weekly Update.
With me this week is John Gillin from Stansberry NewsWire.
And he's here to talk to us today about the recent market volatility and what's going
on with the coming – possible – trade war.
John.
John: We have certainly had a lot of volatility, Amanda.
Opening down 550 yesterday and rallying about 800, so expect volatility going forward.
And our biggest concerns now are a possible trade war, which becomes on again, off again.
It's a lot of showmanship, but I think there will be action taken, and that's going to
change the math a bit on how you invest going forward.
Amanda: Okay, so, given all this recent volatility we've seen, what does that mean for the market?
Should we be worried about a coming downturn?
John: Well, let's keep things in perspective for the market.
And I just want to look at a couple of notes because fundamentals are so important and
they're so good at this point, with earnings growth.
We've got reasonable valuation of about 21 times 12 month trailing, 18 times earnings
now.
We've got dividend increases, buybacks, M&A has picked up, repatriation of cash – all
of this very important for fundamentals.
However, because we've been in investing nirvana, something called the tipping point, which
you've read the Malcolm Gladwell books, and when we take away quantitative easing, when
the Fed funds are moving higher and I do think rates are going up.
That's going to change the math.
Inflation is supposed to kick in at some point in the cycle and that's going to happen and
then the present value of future cash flows changes.
So that's why we've seen so much volatility in particular in the high-flying tech names.
Passive investing has chased into these things and put them to valuations we haven't seen…
I'd say since back in 2000.
So, again, why algos kick in quickly and they become, they take stocks to levels that they're
gonna trade, buy, or sell.
The fundamentals kind of fall away quickly.
Amanda: Okay.
Now, given this kind of environment, what sort of things should we look for in order
to invest, to sort of hedge ourselves against anything that might happen.
John: Hedging is incredibly important.
Because if we were to dismiss the volatility that has taken place – hey, it's an all
clear sign – that would be silly.
So, there's always gold.
Gold's not going to pay you a dividend, but gold is around the $1300 level.
It's going to let you sleep at night.
Silver.
Silver's done nothing in five years.
You can buy the Silver Wheaton stock, SLW, which if we are to get things very frothy,
silver will trade higher in my humble opinion.
I want you to stay away from volatility, the VIX, stay away from Bitcoin.
We can't quite put our fingers on where that is heading.
Other things: AT&T pays you a 5.5% dividend.
Verizon pays you a 5% dividend.
I like self-storage REITs, apartment REITs, they look like they pay over 4%.
So those are some places where you can rest easy, you can hide, if you will.
Don't sell your long-term investments.
But if you're looking for places to just park for a while.
Amanda: Right, some sleep well at night investments.
John: Sleep well at night investments, exactly.
Amanda: Great.
Alright.
Well, thanks for painting a –
John: My pleasure.
Amanda: A much happier picture for us with all of this market volatility.
You can catch John Gillin again on the Investor MarketCast, that's part of the NewsWire service.
We're going to have a link to that in the description below.
That's it for today.
Don't forget to like, share, and subscribe, and we'll see you next week.
John: Great Amanda.
Thanks.
Amanda: Thank you!
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