Brian Belski, the chief investment strategist at BMO Capital Markets, used the word “hypocrites” to describe investors today. He also said “we’re living through “the most hated bull market in history.”
During a recent interview with Fox Business, Belski was asked why, despite no coronavirus package, stocks continue to run higher.
“We think that the market continues to be, meaning the US stocks, continue to be the most attractive asset in the world when you have literally cheap money or zero interest rate money. You have to put your money somewhere, and given the fact that we do think that bonds over the next few years will ultimately be the larger risk category, especially as real rates of return turn negative, stocks are the place to be.”
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He said when he meets with investors, the majority of them believe Joe Biden will win the November election. Many expect it to be bad for stocks. Despite that, he says they are “hypocrites” and continue to buy stocks.
“We actually think investors are hypocrites right now because for the most part the majority of our investor conversations are really transfixed on this notion that Joe Biden is going to be the next president or we’re going to have a blue wave, but yet they are buying stocks. So I think, again, if they are worried about a Democratic wave, why are they buying stocks? Again, they’re hypocrites.”
The election outcome in November will have no effect on the performance of the stock market, says Belski. He also doesn’t think a Biden victory is necessarily bad for stocks.
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“We think politics continue to have nothing to do with the absolute performance of the stock market and we think people are paying way too much attention to politics as they head into this election with respects to the market. I think the bull market in terms of our call for a 20-year bull market continues even with this “blue wave,” but the construct of what we are going to be investing in is going to look very different.”
He says the current bull market is the most hated in history. Additionally, he doesn’t understand why we aren’t talking more about successful companies in the world, like Apple.
“This is the most hated bull market in history, no one’s really believing it, we continue to see nine-out-of-ten stories with respect to the stock market being negative, so again, the first thing you’re asking people all the time is ‘why are you so cautious on the markets?’ Why aren’t we talking about ‘Why aren’t we more bullish on the market?’ We’ve got the best companies in the world. In the prelude to this hit you talked about Apple, Apple’s one of the best companies in the world and we don’t champion that enough.”
Belski says we are now in the second-half of a 20-year bull market. Also, We can expect some volatility. However, there’s nothing to slow down the bull market until the Fed starts raising interest rates.
“We actually think that the second half of our 20-year bull market started on March 23 of this year. That’s not to say that we’re not going to see volatility, and we’ve seen volatility so far in 2020, clearly since March 20, we are going to see volatility surrounding emotions and rhetoric with respect to the election, but we think the largest risk that investors face over the next couple of years is when and if the Fed begins to change its tone with respects to interest rates and I still think that we are several months if not several quarters away from that.”
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