let's turn back now to the major averages joining
us now is Anthony Socorro founder and president of
providence Financial and Anthony stocks
continuing to climb following the volatile
january. We just had, what are your biggest takeaways from what you saw today?
Yeah, it's kind of great to see right.
The reality is that, you know, january was the worst,
worst month that we've had since, I think March of 2000 and 20.
Uh,
and that's really as a result of inflation worries
that the result of the Federal Reserve in jerome Powell
basically coming out and saying that they're going to
increase interest rates 3 to 4 times this year.
Uh, in jerome Powell's confirmation hearing that several weeks ago.
He, that was the first time he really mentioned that.
That's what started this slide. That was in the first week of january.
And then during the last Fed hearing
the last two day meeting,
they basically confirmed what it is that he had said. So
market went down over january primarily because of
inflation and because of what he said,
I'm excited that it's starting to rebound the market
unofficially hit that 10% correction territory didn't close there.
But last week hit that mark.
Um, and now the fact that it's come back four or 5% depending on what you look at.
I'm excited. I think February has got potential to be a good month.
I think there's still gonna be some pull back this
year so that we're not out of the woods yet.
But I love the fact that the market is not down 15 or 20% at this point,
even though the Fed has been somewhat hawkish?
I like that.
So I think the market's digesting the news really
well and it's a good start to february.
I was gonna say that well the tech heavy NASDAQ has been hit pretty hard in january.
Do you think that trend is going to continue?
Do you think there's some bounce back there?
No, I think it's probably going to continue.
The primary reason that the tech industry has been hard,
hard hit is because of inflation, you know,
with the tech industry that has outperformed
just dramatically over the last decade.
Um you know, having hit lows and then, and then, you know,
coming up with companies like Apple and google and, and so on.
The reality is that people want the
That good feeling, that sexy feeling,
they want above average returns from the tech industry.
And if inflation is going to get to 10% and we don't know if that's 7% now or so,
but if it's going to get in double digits as as possible.
Um if if If a company is going to grow at only 15%,
that's not good enough for the tech industry.
So other areas and
like industrials are gonna provide better growth.
So I think we still have problems ahead with the tech industry.
It's something I would not put a lot of uh a lot of stock into at this point,
do you think we'll see more volatility in 2022
if so where do you think it's coming from? Is it coming from Covid?
Is it coming from inflation? Is it coming from jay Powell?
Where do you think is gonna come from if we do see it?
Yeah, I do think we will continue to be volatile,
at least for the next few months for sure.
And I think it's as a result of all of the things that you had mentioned,
I think jerome Powell is probably the number one key to
what we're going to have happened and how well they navigate
the world of interest rates and the stock market.
I think that's going to be the number one key?
The the reality is they've gotten hawkish and they've
navigated it extremely well up to this point.
That's why he was nominated again.
But I think that's number one inflation numbers are
certainly going to have to be a factor.
And what happens with Omicron and now there's a new variant that
I've heard a whisper about that's certainly going to have an impact.
But all three of those things are going to
be critical to the choppiness of the market.
Now we're gonna, it's a big earnings day today.
Is there something specifically that you're watching, not only today,
but in this earnings season now,
you know, um I tend to focus on stocks that pay dividends?
I think that if you have a portfolio of dividend paying
stock that's going to dampen whatever volatility we have in the market
when you're dollar cost averaging.
The simple fact is is that if you're reinvesting those dividends back into
the market then when the market goes down it actually helps you.
It doesn't hurt you as long as you're saving for the future.
So what I'm watching are really the dividend payers,
the value stocks with higher dividends.
Those are the companies that we tend to be focusing more
on for our clients so that volatility is dampened by that
kind of advice do you have for an investor jumping in this year?
Right now, February one.
Yeah.
So if you're jumping in right now markets out a little bit of a discount
if you have no money and you're starting you're starting to save your 401 K.
I'm gonna suggest that you're heavy in the stock market, you dollar cost average,
you put your money in, you put your money in,
you put your money in you by the same things over and over again and
stay the course for years to come and you'll be glad you did just tune out
to all the volatility day by day, it's all a bunch of noise,
keep dollar cost averaging and you'll be just fine over the years to come.
All right,
Anthony socorro founder and president of providence financial Anthony.
Always a pleasure sir, thank you so much for being with us