As with most things “Wall Street,” there will always be a healthy skepticism of the industries’ motivation. In this case, let’s try to be good stewards of our client’s needs for responsible capital gains and security. If so, we might be turning a corner from despair to guarded optimism.
-Scotty George, chairman, du Pasquier Asset Management
Locked and loaded.
Now that the election is over, and the markets are oversold, the Mideast is again volatile, and the “fiscal cliff” is fast approaching, most market concern rests with “who’s going to be the first one in the pool?” Interestingly, although the stars are aligned once again to make money in the equities markets, it is still a psychological, not financial, component that governs people’s capital deployment considerations.
As interest rates have been manipulated into a zero-sum game, literally and figuratively, the only option for converting cash into capital gains has become stocks.
But who is going to trade the security of the fixed income markets for the volatility of owning stocks? And why must they? No one is forcing investors to make those choices. Besides, in the real world that I live in, both professionally and personally, navigation through the financial landscape is not a question of either/or but of fine shadings and degrees of risk-taking.
Why must one consider equities today? Because a cornucopia of other options is receding into smaller and smaller baskets, and most of those don’t include traditional risk-averse vehicles such as CD’s and Treasury bonds.