January 2, 2024

Kingsview CIO Scott Martin On Fox Business Your World With Cavuto 1.2.2024

Click here to listen to the full interview.

NEIL CAVUTO:  Now, of course the backdrop for this is an election year, which traditionally is very good for stocks. Will it pan out that way? Scott Martin at Kingsview Asset Management, Kim Foss of Imperium Wealth Management with us. Kim, what do you see happening this year and whether we’ll follow that script that every presidential election year tends to be a very good one for stocks, even when it follows a very good year prior.

KIMBERLY FOSS: Yeah, I think it’s going to be a good year. I think that folks have looked at their 4 0 1. They’re going to open up those 4 0 1 Ks and look at those returns, and it was pretty dismal prior to the last six weeks of the year. So I think that’s going to be a pleasant surprise so that with the hope of some kind of a positive outcome in the election year, that and then also interest rates dropping, that’s going to produce, I think a return that people are going to actually have really positive returns for this year. Maybe not double digits, like 26%, the s and p 500 like this year or 2023, but I think we’re still going to see maybe low double digits.

NEIL CAVUTO: Yeah, that’s not too Shep. If that’s the case, things could change. The consensus seems to be building, Scott, that at the very least the Fed has done raising rates and maybe it soon as March starts cutting them, are you in that camp?

SCOTT MARTIN: Wow. Wouldn’t that be something Neil? I mean, this was a Fed that was telling us that rates were probably going to go to the sky and inflation was as well. I’ll tell you, Kim made a good point. I mean, last year, Neil, I like to use the technical term, stinky. Last year was stinky until about the last, say, six weeks of the year, as Kim said, and then everything was awesome. All the bears, everybody that was betting on the market to go down, all the people that were worried about the Fed went away and said things were so great and the economy and the markets were awesome. That scares me a little bit because that’s not sustainable, that kind of performance from the markets, that kind of attitude on Main Street is not likely to sustain itself. So it probably means that this year will be okay, but as Kim said, to expect a year like 2023 I think is out of the cards. Especially considering that as Lydia Hughes said in her lead in there, the market is expecting the Fed to cut rates. Inflation is supposed to keep coming down, employment’s supposed to start to rise, which would encourage the Fed to be more soft in their messaging. Those kind of things are hopes versus realizations, and those kinds of things are worrisome when the market hangs their hat on them versus seeing what happens first.

NEIL CAVUTO: Last year at this time, guys, and I’ll pick this up with you, Kim, we’ve come off such a horrible market year where all the averages have got a serious scrubbing. So it took a while for that point of view to change as the year wore on and we absorbed sized bank disasters and failures and fear of another meltdown never materialized. But I’m just wondering if the consensus has now gone so far the other way, Kim, that the contrarian in you might just say, whoa, whoa, whoa.

KIMBERLY FOSS: Yeah, absolutely. Well, I think that that’s the problem. Everybody’s just like when we talked so much about recession and then now we’re not probably going to have a recession because we’ve spoken too much about it. I really do think, like Scott said, there could be this overzealousness in the markets, but at the same time, Neil, this is why you have a diversified portfolio. This is why you have 80% of your money in boring diversification. So it gets you that 5, 6, 7, 8% per year each year. You don’t have to worry about making that decision to be in or out of the market. That’s the most important thing for the average investor out there to make sure that their portfolios are diversified, both us and globally as well. And in the bond market too,

NEIL CAVUTO: You’re talking about that’s a variety of things, not just technology, not that’s magnificent. Seven stocks. Scott, another I’m curious of, do you think this is a rich market at these levels, whether it continues or not, that it’s getting nose bleeding? There are numbers that could tell you not quite others that say, well, maybe if the earnings don’t keep up

SCOTT MARTIN: Nose bleed. Yes. I mean, I look for tissues every day, Neil, especially towards the end of the last year, because every day the market more or less went up when we set records for streaks and the Dow and the Nasdaq on nothing. I mean, really not even good news would come out and the markets would go up. So it feels short term, it’s extended as we tend to pin through and comb through say what the Fed is going to do and what earnings reports are going to look like. My friend in the next say, couple weeks to another month, and therefore the market will likely catch up to what this rally was in the sense of pullback. Some take a break, and then that’s where as an individual vest, you can start reallocating your portfolios and getting after some stocks that have pulled back a little bit because they should.

NEIL CAUTO:  You’re Both relatively young people. So let me ask you this, Kim, what is long-term to you? I’m of the age now where long-term is lunch tomorrow, but now where are you on this and that notion? Well, you stick with stocks, so the long-term you’ll do just fine.

KIMBERLY FOSS:Oh my gosh, Neil, you’re so kind. I’m not too far behind you, my friends. There we go. But it just depends on what people are. Long-term. Typically in the market, you’re going to say long-term is five to 10 years. So that’s in the market. But again, I go back to the notion, look at diversify, be boring in the portfolio. We’re over 12,500 different stocks, around 44 different countries. So look it, that’s 80% of your money. If you want to take another 10, 15% do it, magnifi, seven, overweight, overweight in small caps, absolutely go ahead and do that, but we don’t have to make a mistake about being in or out. So I don’t know, two years to 10 years. It depends on how old you are.

NEIL CAVUTO: I got it. All right. I can do the boring part. So Kim, final word on that, Scott. Great seeing both of you. Happy New Year and thanks for all your insights over the past year. Hopefully a lot more of that to come.

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