MILWAUKEE — Federal interest rates are not expected to drop in the foreseeable future, according to Annex Wealth Management President and CEO Dave Spano, who joined Steve Scaffidi on WTMJ N.O.W. to explain the market’s current outlook.
Federal Interest Rates
Spano told WTMJ the Fed was practicing quantitative easing, or putting money into the market. It switched to quantitative tightening, or buying fewer bonds on the open market. Now, the Fed has to make a decision.
“I think [the Fed has to] look at the data, and what we saw last week is a GDP report of 3.3 percent this past quarter. That was followed by 4.9 percent the quarter before. So the consumer is still spending,” Spano said. “So lowering interest rates to make them spend might be counterintuitive to their goal right now.”
Even though the market isn’t high right now, Spano said some growth stocks are doing better than the overall market. Major tech companies such as Super Micro Computer have doubled their stock price.
“[With] those companies, you have to say, ‘Do they deserve their price, and are they getting more than the market suggests?”
He explained that’s why it’s important to check the portfolios and the past earnings of these stocks to determine whether or not the stock has a good price to buy at.
Presidential Election Investing Myths
When it comes to which stocks to buy, some people base their decision on who wins the presidential election. Spano calls them presidential election investing myths.
“You have to say there’s a Democratic portfolio, and there is a Republican portfolio,” he said. “If [a Republican] is going to win, buy… defense stocks, banking stocks or whatever, but if you think Democrats are going to win, do green energy stocks do better?.. so there’s no question portfolios will move more based on who will win.”
Regardless, these companies still have to perform to increase their stocks, so that’s why it’s a myth, according to Spano.
“Are they going to have more gross… Did you sell more stuff… Did you get more income? Did you have more profitability?” he said. “That’s the true measurement.”
It’s important to know what you’re investing in and to make the smartest decisions possible while investing.
You can hear Dave Spano on Money Talk, The Annex Wealth Management Show every Saturday at 10 a.m. on 620 WTMJ.
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