How to Survive the September to Remember

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Sept. 13 (Bloomberg) -- Principal Financial Group CEO Larry Zimpleman discusses his investment strategy with Adam Johnson and Trish Regan on Bloomberg Television's "Street Smart." (Source: Bloomberg)

A september to remember.

From tapered talk to another debt ceiling debate, upcoming events are keeping wall street busy trying to read the tea leaves and over the last 10 years but both financial has gone from a midwest-based insurance company to a global asset manager and benefits provider, trying to read those tea leaves very closely.

The ceo ring the closing bell on the new york stock exchange.

Thanks for being here.

300 billion dollars under management.

You can go anywhere in the world.

What are the big things for you right now?

I would say there are big things -- themes, the first one would be there is a strong cohort of investors looking for income.

In and zero interest rate world, any income oriented tonics are popular.

The second one is looking for global growth, long-term growth, that is in globally diversified portfolios with an exposure to emerging markets.

And the third one we see from investors have some concern about inflation and are looking for some kind of hedge against risk.

Those are the three primary ones.

The polar interested in income right now.

Do you have concerns we could see a -- people are concerned in income right now.

Do use evidence -- you have a concern we could see a bubble?

The treasury rates have clearly been frontrunning what we expect the federal reserve to do next week when they start their capering program.

We would see as long as -- i would say we are still at the normalized level.

We do not see that as a problem.

When you talk about global growth, where are you going?

I would say it is a matter of being diversified.

So we still see the united states as the best among the developed markets.

In terms of the emerging markets, we see southeast asia as being an area of opportunity and to some extent latin america although i will say some of the political events have caused us to be cautious.

We are more optimistic about mexico and chile.

We have seen protests in brazil.

Is this an opportunity right now?

They have been so beaten down.

Should people be looking to add to their portfolios?

I would want to be cautious about reentering.

I think putting some assets to work would make sense.

I would want to hold a little bit and reserve because it is hard to know how much longer we are going to see this turmoil.

A question about other him mature cut -- other mature economies, u.k., japan, what do you see in europe?

There may be some recovery.

I think we are seeing the early signs of recovery, david.

Whether and how sustainable it is is yet to be determined.

Probably the one where it seems more substantive is japan although i will say, with a number of visits, i would say i would rather see a couple more quarters of sustained growth before i would go in there.

The third theme you mentioned was in flushing -- i nflation protection.

We are below the fed's target.

Why is inflation on the minds of investors and money managers?

That is a great question.

I think it is more a question about, it is going to be inflation, six months, nine months, 12 months.

You are right.

Or is nothing today that says inflation.

We have seen these conditions before and it can ramp to higher inflation in a short time, if you look at commodity prices, for example.

If you look at real estate.

All of those are inflating rapidly.

If those were to spread, we could see inflation pickup.

There are investors who have concerns.

Is your money on for fed chief?

We are not into that rotten ostentation.

I think everything i read says it is likely to be mr.


But we don't have a particular view.

You don't have a view.

Some people have suggested he might be a little more hawkish than janet yellin.

How do you prepare one way or the other for a change at the top of the fed?

It is not perhaps the most marked a captivating way but we believe in diversification.

-- most market captivating way but we believe in diversification.

You never bet the farm.

I think that is a good strategy.

You want to maintain diversification.

You can't predict the economy.

Would you say you have a preference?

One over the other?

I think janet yellin would reflect more continuity although i will tell you as having exposure in the insurance area, the zero interest rate policy mr.

Bernanke has been executing has been ethical on savers -- difficult on savers.

We are happy to see interest rates move back to a more normal level.

That would argue for mr.


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