Reuters Insider - Not much upside left for stocks - Snider

Kedge Construction Co

09/07/2019 08:18

Click the following link to watch video: https://share.insider.thomsonreuters.com/link?entryId=1_zp3k8dv9&referenceId=tag:reuters.com,2019:newsml_OVAMX5VNV_930&pageId=ReutersNews
Source: Reuters Insider

Description: Harness Wealth CEO David Snider tells Reuters' Fred Katayama he
thinks the S&P 500 doesn't have much room for further gains.
Short Link: https://tmsnrt.rs/2xDt5bI

Video Transcript:

Wall Street retreating Monday afternoon, extending Friday’s setback
following that jobs report. Let’s talk markets now and also take a look
at the market for Gen X investors. We’re joined by David Snider. He is
Co-founder and CEO of Harness Wealth. Welcome, David.

Thank you.

So it’s not just the US equity markets globally are down Monday,
what’s the culprit?

So we hit all-time highs below that jobs report on Friday and I think
ultimately July is going to be a tricky month where people don’t want to
hear good news that might prevent the Fed which the market expects from making
at least a 25-basis-point rate cut. And so it’s the sort of I expect kind
of pendulum swing month as people sort of wait and see what happens.

Is it fear right now the rate cut won’t be as big?

Yeah. I think the market is pricing in a rate cut. It’s pricing in a
sense of stability in a broader theme of chaos in global trade. And so I think
if there’s any disruption to that, then it’s pretty significant.

So second half, where do you the S&P faring?

I think personally overall, I think it’s hard to believe that the year
ago is much higher than it is now today, but also I don’t see a reason
immediately that they’re going to have—that they’re going to
hit that, trigger that someone talked about all of a sudden having a pretty
significant decline.

So sort of neutral, the markets may peak somewhere around here, you’re
saying? Alright. On to your business, you focus on the Gen X investor.
Everyone that comes alive here, what they talk about, they only talk about Gen
Y. Gen X – that’s the generation born in the mid-‘60s to the
‘80s, right?

Exactly.

Why focus on Gen X?

In part for exactly the reason that you mentioned. I think there’s this
mentality shift from baby boomers all of a sudden to millennials. And while
they are twice as big a population cohort, in 2030 Gen X will have twice as
much assets as a generation. It’s half as big, so 4x the average per
capita of GDP. It’s also the generation that’s most likely to be
sandwiched in taking care of a parent and also taking care of a dependent, and
one that went through a pretty significant shift in the role of companies in
providing retirement benefit from pension and defined benefits to a more
self-directed one. And so we felt like there’s a lot of Dollars and a lot
of opportunity and a really important group to try to help with an integrated
solution that combines financial planning tax strategy and also trust and the
estate.

With Gen Y, a lot of people on my show talk about hey how they’re
reluctant to take risks because they’ve seen the market downturns. They
have not saved enough, they’d rather spend it on experience. What can you
say about the Gen X investor, who are they?

Yes, so the propensity to take risks really varies considerably. There’s
no one size fits all. What we’ve found in a survey of 1,000 Gen X
households that we ran a few weeks ago is that, what is similar is that the
vast majority despite spending a few hours per month on finances still feels
uncomfortable about their level of knowledge and sort of what they’ve put
in place. 83% feel comfortable with using financial technology, but only 7%
are primarily using that to actually manage their assets. And so what
we’ve found and part of the impetus for this business was a desire for
that hybrid where interestingly those using an adviser report being twice as
happy as those that are doing it themselves. And of those that are not using
adviser, 80% say they’d be open to it if they found the right person to
help them.

So they need some hand-holding, they like hand-holding. Lastly, if there was
one tip you’d give the Gen X investor, what would that be?

I think being patient and long term-oriented, but the most important is
actually not feeling like it’s too late to take action. I think that
they’re in the early research that we saw on the psychology of this, that
a lot of people feel like oh, I don’t know therefore I shouldn’t do
anything, or now all of a sudden I’m late 40s or early 50s—

50s now.

It’s too late. And we’ve found that there’s huge incremental
value on a 12-month horizon, let alone a 10-, 20-, 30-year one of what can be
done from more careful thinking on when do you take the standard deduction
versus when do you itemize of maximizing retirement playing in tax advantage
benefits as well.

Okay, David, will take that tip then. It’s not too late or never too
late, in your words. Our thanks to David Snider of Harness Wealth. I’m
Fred Katayama, and this is Reuters