Eric Beiley, executive managing director of The Beiley Group at Steward Partners, spoke with Quartz for the latest installment of our “Smart Investing” video series.
Watch the interview above and check out the transcript below. The transcript of this conversation has been lightly edited for length and clarity.
ANDY MILLS (AM): It could be a crazy week for earnings. We got tech on deck. What are your expectations?
ERIC BEILEY (EB): Expectations are high. The markets are trading near their highs. For the S&P 500, the markets are saying we’ve seen good earnings so far, and then this week is critical, right? You have the big Magnificent Seven names, Alphabet ( GOOGL ), Apple ( AAPL ), Amazon ( AMZN ), all reporting.
AM: The Mag 7 are all at or near all time highs. They’ve been a part of a big wave of growth. How high can they go? Should investors keep investing in these seven-ish tech names?
EB: I would say yes, because they’ve proven over the long term to produce tremendous results for investors, for their shareholders, and they continue to grow. So, and some of them, you could argue the valuations are, are attractive here, but it’s gonna be important to see what their, what their numbers are. Clearly.
AM: One of the things that I am sure we’ll get some kind of read on is their spending on AI. Do you think that the market could react badly if investors don’t see a particular result in that spending yet? Or is it too early to tell?
EB: No, I think AI is a major long-term powerful trend. You can’t ignore it, right? We’ve seen it. Look at Nvidia ( NVDA ) now, one of the largest companies in the world as demand for their chips is off the charts. And that’s because of this AI phenomena. And so Meta ( META ), formerly Facebook, Amazon, they’re all in that business for the long-term, investing billions of dollars. So I think AI is a long-term trend that’s gonna be positive for the markets and investors.
AM: Tech is still okay. What other recommendations do you have for investors out there?
EB: Well, clearly there’s a lot going on, right? You have this Friday, you have the employment numbers. That’s gonna be very important to see the health of the economy. And that’s gonna dictate where Fed policy goes, expectations are a few more rate hikes. We’re seeing that in the yield curve and that that’s positive for asset classes in general. Lower rates is positive. Then you have the election, clearly, right? That’s gonna be massive. The markets are right now trading based on what the predictions are for the election. So that’s very important. And then after that, you have the Fed meeting to show what their thoughts are. Are they gonna cut rates again?
Photo: Anna Moneymaker (Getty Images)
AM: The election. It’s gonna be a thing.Is there a way that investors can prepare for that? Should they sell everything? Should they double down? Like, not to be drastic or dramatic, but what do you think?
EB: Well, as a financial advisor, we look for long-term goals to meet my client’s objectives. These are 5, 10, 15, 20-year financial plans we put together. So while this election is massive and very emotional for a lot of people, you have to look at the long-term. You have to look at your own situation and make those decisions. I think traders, we’re seeing it. The trading activity is certainly active right now, predicting whether Harris or Trump wins. You’re seeing right now, in my view, the markets are predicting a Trump victory. You’re seeing certain asset classes doing well that would perform a better in a Trump presidency,
AM: Such as?
EB: Crypto, number one . Clearly you’re seeing that the media stock for Trump has gone up tremendously in the last just week or so . So that’s showing signs that the markets are leaning toward Trump.
AM: What is the market expecting for Friday’s Job number?
EB: I think a good number. The markets again are acting extremely well. You’re seeing equity prices continue to go higher. The interesting part of the market now is where the rates, right, the long end of the yield curve, the 10-year treasury yields and longer have really gone up. And that’s predicting that the economy’s gonna stay strong and healthy. And therefore, while we’ll see more rate cuts, [there will be] not as many as predicted. And so Friday’s going to I think we’ll see a strong number and so the Fed will cut rates, but a small reduction and probably pause sometime next year in their cuts.
AM: Gotcha. So it sounds like we’re in a good place right now, despite all of the news that’ll be coming out.
EB: The trends are very positive and trends are powerful, right? Don’t fight trends, typically, for investors. Right now, the trends are higher and you have good signals out there. You’re having good third quarter results from companies. You have a good economy, rates coming down. All of those are very positive for asset classes in general.
AM: Your firm is a fan of something called ‘dividend aristocrats’. Can you tell me about what a dividend aristocrat is and what your picks are?
EB: Yeah, well I’m a fan of dividend aristocrats. So these are companies that have proven to be great long term investments because they share their profits with their shareholders. So they are doing that through dividends and they’ve increased their dividend payments every year for 25 consecutive years, which is hard to do, right? Because you think back over 25 years, there’s all types of economic cycles. Companies go through ups and downs and these companies have proven to increase their dividend payouts consecutively. And so I like these companies. There are three, I like Walmart ( WMT ), S&P Global ( SPGI ), and Brown and Company, the insurance company. They’ve all outperformed the S&P 500 on a 5- and 10-year basis. So, to me, these are great long-term investments.
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