How To Invest In Todays Complicated Market
b'With Bruce Johnstone, Managing Director and Senior Marketing Investment Strategist at Fidelity Investments
Bruce Johnstone discusses tips on how to invest, the current market volatility and the unprecedented degree of\\xa0 governmental intervention in the monetary system.\\xa0 He suggests that in spite of this stimulus, economies are not responding as expected, and the markets are concerned about low growth and the possibility of deflation.
Bruce then busts the myth that good investing should only include great companies, because as manager of the very successful Fidelity Equity Income Fund, he concentrated on cheap companies, citing that many great companies are over-valued.
He used four criteria in choosing these cheap stocks: high dividend yield, low price to earning ration, low price to book value, and low price to sales.
When asked where the best values were in the world today, Bruce said he felt that investing in the US is the best choice, because so many foreign countries are suffering from the oil crisis and other structural problems
Steve expressed concern about the fact that large foreign bank stock prices were back at 2008 levels and wanted to know if this was the so-called canary in the coal mine. Bruce responded by pointing out that the banks are in much better shape today than back then, and he feels that in most instances the market had over-reacted to fears of a banking crisis.
The discussion turned to\\xa0 negative interest rates, and both Steve and Bruce commented on how weird the situation had become.\\xa0 Steve mentioned that Scandinavian mortgage holders where being paid interest by the bank each month, and Bruce said that although it is mind-boggling, he thought this would last a very long time. But to invest successfully, one had to do the research to find the cheap stocks that are always hiding beneath the radar.'