- 2024-10-30
- Posted by: kimsite
- Categories: Commentary, Insights, News
Click here to listen to the full interview.
CHARLES PAYNE: Folks, let’s bring in Scott Martin, Chief Investment Officer of Kingsview Wealth Management and, of course, a Fox Business contributor. Scott, earlier in the show, we talked about Wall Street’s outlook for the next 10 years. There’s this notion that things will flip. Just to clarify for the audience, this is about growth stocks. Over the last 10 years, they’ve averaged a 16.5% return annually, with large caps up 13%. But now some are saying it’s going to be all about small caps, international stocks, and emerging growth. We even had two guests today who backed this idea. Some also say the bond market is in play. Are you buying it? Do you think we’re on the verge of a complete shift by 2025?
SCOTT MARTIN: There might be some change, Charles. I mean, some of these predictions are almost too good to be true. But here’s what I like: some numbers do look great, and returns look impressive, don’t they? But you’ve got to consider the Sharpe ratio—the measure of risk versus return. I don’t see that ratio working out favorably for international or small-cap stocks. If you’re focusing on Sharpe ratio, basically what you’re paying for those returns, I’d say stay with large-cap growth. That’s where the earnings are. If there’s any shift in interest rates, and I believe there will be, or a change in political policy, I’m sticking with the big players and staying in large-cap.
CHARLES PAYNE: Sticking with momentum—it’s worked well over the last decade. I’m glad you brought up risk, reward, and the Sharpe ratio because it doesn’t get discussed enough. Sometimes, the risk just isn’t worth it. Speaking of, if you’re sticking with the “Magnificent Seven,” you’re invested in Google. They just posted amazing results—strong across revenue, earnings, ad revenue, and cloud. But every time they perform well, people wonder, “Can they keep it up?”
SCOTT MARTIN: They’ve been questioning that for several quarters now, but for me, the focus is on Google’s performance in cloud and YouTube. I love YouTube. If you jumped off these stocks based on analyst opinions, like Pee-wee Herman falling off his bike, you’d have missed these gains. I’m also a fan of Amazon and Meta in this space, even though they’re pricey. They’re still delivering, just like Google.
CHARLES PAYNE: I just spoke with Alicia, who said these stocks are expensive because they deserve to be.
SCOTT MARTIN: Exactly.
CHARLES PAYNE: You also own AMD, which hasn’t performed as well, but I want your take on the broader market. We’ve got the bond market telling one story, stocks with an upward bias, and ongoing anxiety, which the headlines keep reminding us of. Do you think things will change dramatically after next Tuesday?
SCOTT MARTIN: No, I think the anxiety will increase, and honestly, I love it. As my kids say, “the haters are out there.” Look at AMD—sure, it had a rough day. But that’s when you buy. If you see anxiety driving down the price of stocks you like, that’s the time to buy. AMD’s earnings were fine; it’s just that Nvidia is crushing it in the same space. But when a good stock pulls back, that’s an opportunity.
CHARLES PAYNE: Will the election impact your outlook? Would you adjust your approach based on the outcome?
SCOTT MARTIN: I’d change my tune if we see a market rally after the election, but I think we’ll see a sell-off. It’s likely to be an anticlimactic, “sell the news” reaction.
CHARLES PAYNE: Got it. See you soon, Scott!
