Cohen: Gold Will End Year Down, Market Could See Midterms Correction

0:00Joining me right here on set get the bigger picture Doug Cohen's here senior portfolio manager fiduciary trust International thank you for being here so some of your thoughts on the big picture I mean there's no doubt we're seeing some big moves extreme volatility not the biggest ever but Enough to grab our attention your thoughts. Yeah, so first of all it's great to be with you again And I think I think your lead-in was perfect look it's it's a sloppy day It's been a somewhat sloppy week, but you know the essence if you use the S&P as a guide We're down a little over a percent today. We're down less than a percent for the year It's not all together shocking and as per your previous conversation with Kevin oil prices are cute You know clearly a key driver and the spike that we've had the last few days not not surprising that we're seeing some sloppiness in the market So, you know, we're on the Iran conflict um here day six and your thoughts on Look, this could go for some time, you know, now we've seen disruptions in oil

1:00We also had you know um an Iranian missile hitting a refinery that was a report of a tanker being hit We're gonna get a lot of that straight-up hormones, you know, is it operational or not? So where do you think oil could go do you see 85 or 90? So There are a lot of things in the world that are somewhat predictive all and and this is probably not one of them This is really hard because we're subject to again, you know, one tanker gets hit whatever may happen in the state of hormones It's war and it's real-time Again the market I think has taken a somewhat sober approach Not you know, they're not the market's not terrified. We're not seeing extreme reactions But there's a level of uncertainty and a level of concern In your question you mentioned, you know, how long can this last that's really the key question I think there's a hope certainly from the market that if this can somehow if we can get through this military operation Over the course of the next four weeks or so That's probably a time frame the market can live with

2:03If it goes on much longer than that I think for a lot of different reasons including politically It's going to be much more difficult. So the time frame really matters I had a guest who said today, you know, expects a pullback for stocks and also for IGB and those software stocks They got a little bit of a bouncy expected those to pull back once again And he said look once we get like a 5% pullback in the stock market that I'm going to start fishing around and looking Are you in the same boat? Is that what you're waiting for more or less I think in the really big picture you think about we came into this year with three very strong years Behind us especially for things like the S&P 500 and some of those mega cap growth stocks It's not shocking that we would have a little bit of a pause, but when you when you do take a step back Highly elevated earnings relative to history Very aggressive expectations for earnings growth in a midterm year Which traditionally is by far the most difficult of the presidential cycle We were probably teed up for at least some sort of a pause here right and so to get to your you know to the heart of your question

3:04Upon a reasonable correction and and 5% sounds sort of like in the right ballpark all else equal I think we'd be a lot more interested in getting more aggressive. Do you think there's opportunity in gold? Does that go higher? How much higher? So every year I do one of my 10 surprises and we actually talked about this a little bit my last time you were here so I I've spent most of my adult life encouraging folks to have at least a few percent of their portfolio and gold We had such a run-up last year and really over the last few years that my expectation coming into this year was that we would see A surge past 5,000 we started around 45 4,600 past 5,000 and that ultimately That's going to set the stage for a pretty sharp correction. I think gold will end the year gown It's one of the most consensus trades out there So that's for sure and it's actually you know, it's interesting You never want to you never want to extrapolate too much from one day or one week But the fact that gold hasn't really responded with all the uncertainty and Iran. I think tells you it's a it's a crowded trade You do like health care and industrials. I do what kind of names in there. I mean when you say health care is pretty broad

4:09So I know we're not going to talk about an individual stocks today, but I'm gonna So I do like health care and industrials. I'll give you a blanket statement though On interviews like this. I always like to talk about sectors Where we are in the market right now We are seeing such dispersion with in sectors that I think it makes it very dangerous to talk to you know Sort of paint with a broad brush. I like pockets of industrials More I am a little bit concerned about some of those that are very tethered to the AI trade Again, I think those are consensus within health care I think the worst of some of the regulatory pressure is over I think that will help some of the drug stocks Some of the biotech stocks. I'm a little less enthused about managed care insurance How invested are you when you think about asset allocation and and you know stock spawns I don't know alps and cash are you pretty heavily invested right now? Yeah, I mean for most of our clients we try and stay fully invested but diversified That's the most important thing in part of the reason you stay diversified is because of moments like this when the world feels really uncertain

5:13So you have a little bit of a cushion and so we do for the majority of our clients We do have some alternative exposure with hedge funds private equity a lot of come of things like private credit But still rely on public equities to really do the lion share of that compounding over the long term and try not to get too cute there And also you know you really you know you're saying that you're in you're not pulling out right now That's good dog cone great to see you. Thank you so much. See you portfolio manager fiduciary trust International