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Yahoo Finance’s Alexis Christoforous and Wall Street Alliance Group Partner Aadil Zaman discuss the latest market developments amid bullish news about coronavirus vaccines.
Video transcript
ALEXIS CHRISTOFOROUS: You want to talk more about the market action now with Aadil Zaman. He is a partner at Wall Street Alliance Group. Aadil, thank you for being with us. So I should think this market is a bit overbought here today. What’s your take on what we’re seeing?
A NAME TIME: So great to be with you. We think, you know, this vaccine news is great news. And you know, 90% efficiency is amazing. You know, you look at the flu shot, it’s 40% to 60% effective. So really good news.
But we think the market may be a little ahead of itself. Because in order for this vaccine to be available for you and me to start using, it probably won’t be until fall 2021. So we think this – and by then you see the COVID cases -19 develop rapidly. So we think this market is a bit ahead of itself and there may be a short term correction due to the market.
ALEXIS CHRISTOFOROUS: As you envision a Biden presidency, what are some of the things you say to clients, or clients ask you, in terms of where they should be focusing their money, their investments?
A NAME TIME: So Alexis, we feel that it is an active management market, where we feel that certain sectors will prosper and certain sectors are not doing so well. We also believe this market is in a long-term uptrend, with several short-term corrections along the way. And we believe these fixes buy opportunities in some specific sectors.
So, for example, under Biden, we think clean energy is going to work really well. And Biden has a very good relationship with Mitch McConnell, and so his diplomatic relationship will make for good relations, and through executive orders, he will be able to pass certain initiatives. We also believe there are opportunities in China here, as Biden’s approach to China is going to be completely different.
It will involve the World Trade Organization. It will involve other countries. And there could also be a potential tariff reversal. So we believe that there are also opportunities in China. We therefore believe that market corrections are opportunities in this type of sector.
ALEXIS CHRISTOFOROUS: OK, so China, you see, is an opportunity. What are the areas you would stray from during a Biden presidency?
A NAME TIME: Well, you know, we think it’s very important right now to have a very well diversified portfolio, right. So think about it. The gut reactions of today, the energy spike, the financial spike, and those are things that haven’t worked so far. So if you weren’t exposed to these sectors at all, you would have missed it completely.
So we believe that in a well-diversified portfolio, you should have all the asset losses, but underweight some. But we believe that at present, this market will offer us many opportunities to take advantage of certain good quality sectors. Now look at it this way, we have a Democratic president and we have a divided Congress. Historically, the market has done its best in these types of scenarios.
But what the market is ignoring is that if those two seats, Alexis, in Georgia, if these become Democrats, we may be looking at tax hikes in 2021 which could lead to a correction in the market. So investors should focus on, you know, on diversification, putting in place risk management strategies and using corrections as buying opportunities in specific sectors.
ALEXIS CHRISTOFOROUS: Before I let you go, I know you like some actions in the social media space as well, one of which is Twitter. And we know there are a lot of large-cap tech stocks that come under the microscope on Capitol Hill. We don’t yet know what the new Congress is going to do with it, but we have to think that the regulations are coming, the fight to want to break them will continue. Make the case for these social media companies, Twitter and Facebook in particular.
A NAME TIME: You know, we’re in a very stressful, news-hungry environment right now, Alexis, right? And people need to be able to connect with other people, and social media gives them an ideal platform to be able to do so. And these tech companies are designed – you know, their business structures are set up so that they can meet legal challenges.
Look what happened to Google. They got an unfavorable decision and the stock went up. So we think Twitter is relatively undervalued in this space because they’ve done a great job increasing user engagement and monetizing the space. Most importantly, we believe that in the tech realm, e-commerce is going to continue to thrive, and that’s why we’ve seen Amazon succeed.
But another company we see potential in is Alibaba, which will benefit more from the de-escalation with China. So we generally think that tech, even if it’s taking a hiatus today, is a good place for investors, because the only reason tech would have taken a hiatus was if there would have been higher taxes, which is not the case under a divided government. seems likely.
ALEXIS CHRISTOFOROUS: Alright, and for disclosure purposes, we have to point out that you own Twitter, Facebook, and some Chinese stocks including Alibaba. Aadil Zaman, Partner of Wall Street Alliance Group, thank you very much for being with us.
A NAME TIME: Great to be with you, Alexis.
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