Welcome to another edition of PowerTalk. I’m your host Chris Versace, editor of the investment newsletter PowerTrend Profits and portfolio manager of the Thematic Growth Portfolio at Fabian Wealth Strategies, and these are my one-on-one conversations with the movers and shakers in the business world that take you behind the scenes and in the know. Be sure to check out ChrisVersace.com for more on PowerTrends and past editions ofPowerTalk, as well as FabianWealth.com for more on my Thematic Growth Portfolio.
I think it’s very fair to say the start to the stock market in 2014 has caught many by surprise with its sharp move lower in late January. I talked all about that last week when I shared with you my PowerTalk conversation with Lou Dobbs.
We’ve seen some life in the stock market since then, and even though the market may snap back on a technical basis, economic and industry growth concerns remain. That combination will make for a more challenging stock market in 2014, compared to 2013. The strong stock market in 2013 meant it was hard for investors to go wrong, but as we are seeing, 2014 is setting up to be a very different stock market... more of a stock picker's market.
Joining me on PowerTalk this week to discuss the recent pullback in the stock market and where it is likely to head, both in the near term and longer term, is my good friend Keith Bliss. Keith is a Senior Vice President at Cuttone & Company, the floor broker with the largest operation at the New York Stock Exchange. I've known Keith for many years now, and this is the kind of conversation that he and I have on a more-than-periodic basis. It’s an inside baseball conversation about the stock market, and I think you’ll find it very timely.
As Keith points out, investors will be dealing with volatility in the stock market as the Federal Reserve continues to taper its stimulative quantitative easing efforts. Alongside that, economic data, corporate commentary and other tea leaves will determine the direction of the stock market. After talking with Keith, I think you will be more than surprised by what he has to say.
That said, we both agree there are pockets of opportunity to be had -- pain points such as cybersecurity and the current drought situation, as well as opportunities, such as the intersection of mobile, the Internet and computing, that are reshaping industries and business models around us. Keith and I also discuss a looming pain point in the United States -- the increasingly older U.S. population that is looking like it will not have enough retirement savings to last its golden years. Data from a number of sources reveals 44% of Americans are living paycheck to paycheck, the average 401K balance is only $64,000 and the payroll-to-population ratio in January was just 42%.
Make no mistake, there will be some long-term pain felt. The question you should be asking yourself is: how do YOU profit from it?