Where Can Investors Turn in Search for Yield?

REPLAY VIDEO
Your next video will start in
Pause

Recommended Videos

  • Info

  • Comments

  • VIDEO TEXT

Jan. 7 (Bloomberg) -- Henley Smith, CIO at Commonwealth Asset Management, explains why dividend-paying stocks are not a substitute for bonds and offers his investment strategy on Bloomberg Television’s “Bloomberg Surveillance.”

Yield equivalent?

People are buying dividend and dividend growth like there -- bill gross used to clip coupons in the mail room at timko when he could barely shave.

-- at pimco when he could barely shave.

Seriously, they are not a yield, are they?

A riskier asset, relatively, but i think the pension over the last couple of years is the bond substitute dividend paying stocks has been a good place to be.

I think the valuations are probably a little bit too high.

I think there is -- where are you right now?

We are rotating in a shorter duration.

We're going to let the year pan out.

Again, it has been a rotation and a shorter duration.

Exclusive, henley smith, to the beach.

In all seriousness, we had the central bank policy pretty much aligned across various nations for quite some time.

This year may be the year that there are some divergence, that the ecb maybe continues its policy of easing while the u.s. continues tape or in.

What do you think the investment play is there?

Again, i think the emerging markets have had some difficulty.

If the fed continues to step back, that market will have trouble.

These markets will continue to put capital in there.

I think europe is on the mend.

You're seeing people started to move back to those markets.

After they moved 30%. europe had a great year.

What do you perceive consensus is on the street in this january 2014? steady as she goes.

I think early in the year.

We had a great year in stock/are.

There's no reason it can't be followed up by a good year.

I think the real key in the bond market is not some much the level of rates, but the magnitude and the velocity of change.

You don't agree with kit that they have to get the level up?

I do think they have to get the level at -- level up, but if it moves too quickly -- how do you respond to the suggestion they should do a rates increase immediately just to begin to close the gap?

I agree with that as well.

You're going through this tape or an tapering is not a tightening, but it really is.

Can we get rid of the word taper in 2014? your job is to come up with a new word.

We need a new word.

Get the brand gurus together.

I have been trying to use negative easing, but nobody is buying that.

Short-term duration.

What does your retiree do with $100,000 right now?

There are some good relatively yields in thanks.

Cds as well.

It sounds boring, but it will give you the protection to be up to make a bigger move once we get through this.

It sounds really boring.

What about alternative assets?

Absolutely -- high net worth individuals.

You are starting to see much more alternative space.

Liquid alternatives -- for those retirees that have $100,000. they're being pitched products in the alternative space.

To be careful, yes.

You want to be an accredited investor when you get to those spaces.

The accredited investor, family office space, high net worth and the visuals are starting to move into more direct investment deals.

Property and things like that?

What is in accredited investor?

I think one million net worth or up.

89% of our audience is accredited investor.

Thank you for getting us started . our twitter question of the day, betty liu and christina had a fistfight earlier this morning.

Mittens or gloves?

You go with a combo thing?

I do.

I like the ones without the fingers at the top.

Yes, for your smart phone.

We will be back.

Stay warm.

"bloomberg surveillance." ?

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

Advertisement

BTV Channel Finder

Channel_finder_loader

ZIP is required for U.S. locations

Bloomberg Television in   change