Geopolitical Risk: Investing in Tumultuous Times

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July 21 (Bloomberg) -- James Awad of Plimsoll Mark Capital discusses investment plans and his approach to the markets during times of geopolitical risk. He speaks on “Market Makers.”

Posture be at a time like this?

Geopolitical events usually do not affect the stock market unless they get out of control.

Do not react to it.

In general, the market is not cheap?

It is in the zone of ok.

You generally want to have a conservative quality posture.

Not because of the geopolitical events, but because of where stocks are selling.

We don't want to wait until things are out of control.

By then, the market will have reacted.

What are you looking for to determine for yourself what constitutes out-of-control?

Out-of-control will be sanctions.

They got so serious that they caused a default of the financial institution in russia, which backed into europe and the united states.

We are a long way from there.

That is how it would happen.

We would continue to punish them.

In gaza, it would be of hezbollah decided to join the fray.

It would be a regional conflict that has the potential to affect the price and the flow of oil.

Those are the two negative scenarios.

I do not think either of them will happen.

It is unlikely that they will happen.

It is possible, but unlikely.

These events could be an excuse to sell off.

This is a very important earnings week.

I think earnings will be ok.

If there is a selloff, i do not think it will be a sustained one.

Stocks are not cheap.

Even if we do not see a market dip, could we see more investors, especially private law clients, put more money in cash?

There's been a lack of confidence in the market and this cannot make people feel more confident.

Could we see more people sitting in cash?

This market has caused worry.

That is what the bulls say.

The individual investor may be permanently impaired.

They have the financial crisis in 2007. they had the tech crisis in 2009. they may put less in stocks than they would have historically.

Institutional investors are tremendously complacent.

They have tremendous speculation in certain aspects of the market.

Sum is small technology stocks.

The speculation of the fixed income market is as bad as it was in 2007. isn't as bad given that there is less leverage in the market?

There is leverage in areas that we do not know.

The reach for yield is back.

This is a big debate.

The fed has forced people to take on risk to boost up the economy.

There are those who say that it is creating risk that we will experience in those situations.

Do you believe that that constitutes a bubble?

If so, what will happen if it bursts?

A bubble is hard to find.

There is no asset class that is cheap.

Stocks are relatively cheap.

What the fed has done is made everything expensive.

Commercial real estate, real estate in europe, junk bonds, european bonds, low-quality stocks.

There is no asset class that is compellingly cheap.

So, the jury is out on the long-term implications of what the fed did.

We're telling investors that you can stay in because the economy is growing and multiples are ok.

Absolutely upgrader quality in the fixed income and stocks.

Even if that means lower yield?

This text has been automatically generated. It may not be 100% accurate.


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