In this episode of Paramount Wealth Perspectives, host Chris Coyle is joined by Scott Tremlett, CEO and Chief Investment Strategist at Paramount Associates Wealth Management, to answer pressing questions from the community.
Tune in as they break down key economic concerns, including the impact of tariffs on the economy and investment strategies, insights on AI’s role in the tech sector, and Scott’s perspective on international stocks as undervalued opportunities. They also discuss the strength of the U.S. dollar and its implications for global investments.
Gain valuable insights on navigating uncertain markets and learn how strategic investing can help you stay ahead. Don't miss this informative episode filled with actionable advice for investors of all levels.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Chris Coyle (00:00):
Intro song
Speaker 9 (00:11):
Hello, everyone.
Welcome to Paramount WealthPerspectives, your go to podcast
for the latest updates on globalmarkets and current economic
events.
This is your host, Chris Coyle.
I am the Marketing Director andFinancial Advisor here at
Paramount Associates WealthManagement.
And today I am joined by ScottTremlett, Chief Executive
Officer and Chief InvestmentStrategist at Paramount
(00:34):
Associates Wealth Management.
Today we're doing it a littlebit differently.
We've been listening to inputfrom our community and we are
striving to make this aseducational to them as possible,
including our clients who arethe pillar of our community.
With that being said, we reachedout to them, ask them to send us
questions, which we're going tobe going over today with Scott.
(00:58):
First question, that was.
Inputted to us was from a personwho wanted to know, obviously
about kind of the elephant inthe room, tariffs how has that
impacted the economy?
How is it going to impact theeconomy?
How has it impacted, if any,your investment strategy?
Thanks,
Speaker 10 (01:17):
Chris.
Well, game on.
Let's tackle that elephant hereright away.
Well.
So, generally speaking, as ofnow, there has not been an
effect on the economy, but theperception of what's going to
happen in the future is reallywhat's driving the markets down
here right now.
In general, markets don't likeuncertainty.
(01:38):
And these tariffs and thereciprocal tariffs coming back
at the United States arecertainly a level of uncertainty
that makes the marketsuncomfortable.
Now, let's remember when itcomes to tariffs and inflation
to us as the consumer, this is aone time event.
Things will reprice.
(01:58):
So if XYZ product was 5 beforewith the tariff, maybe it's 6
and we can make thedetermination whether we're
going to purchase that or not.
As of right now, we aren'tseeing retail sales slowing and
this was going into this year.
I have seen revenues in thepredictions for revenues over
(02:20):
the year for corporate Americastart to decline.
And so if tariffs start to eatinto those margins a little bit
further than even what we'reseeing and what was projected
going into this year, then atthat point we could see a
deterioration of earnings, stockmarket, and everything else to
follow.
Speaker 9 (02:38):
And Scott, in light of that and kind of continuing
that line of thought, what wouldyou, if any, have sort of a
prediction for?
Year end for the market.
Well,
Speaker 10 (02:49):
going into this year, and I don't think I've
really changed my tune on this.
I really expected the S& P 500to end the year up maybe 4, 5,
6%.
And that's really just lookingat what we've gone through the
last two years.
The last two years, we've hadrobust growth.
We've had robust earnings.
We've had robust growth in termsof the stock market.
(03:12):
And that's all fine and dandy,but when it comes down to it,
Valuations in the United Statesare pretty high.
So when I'm doing my rankingsaround the globe, first I start
with the growth factor, twosides of that current, and then
there's momentum.
But secondly, I start to weightthat versus what areas of the
world are undervalued based orunearnings and what areas of the
(03:35):
world is a monetary policyhelping out those economies
instead of trying
Speaker 9 (03:41):
to slow the economy.
I got you.
And I think, as you mentioned, alot of there was a lot of growth
2022 2023 driven by techindustry.
Certainly a lot of industries.
One of our clients had aquestion asking about AI.
And I guess the tech industry ingeneral, what long term risks do
(04:01):
you see?
What opportunities do you see?
How has it changed this year?
And how is it, you know, shapingoverall in your investment
strategy?
Speaker 10 (04:08):
Well, I mean, going into this year, you know,
certainly AI is going to be withus going forward.
And there's going to be a lot ofmoney spent on AI.
Now, there's a couple differentways to play that.
One would be the chip makersthemselves, NVIDIA's,
Qualcomm's.
Broadcoms, things of thatnature, but then also you can
look at how, how is theinfrastructure going to be built
(04:31):
to house those chips, keep themcool, things of that nature.
So I was going into this year.
I looked at utilities as an areawhere you could get some growth
characteristics, and there's twosides to utilities in my mind.
One is that cheap, defensive.
Pay a dividend, don't move verymuch, kind of move just based on
rates.
And then there's the other side,which is the more aggressive,
(04:53):
more growthy style of utility,like a talent energy or
something of that nature, whichthey're expected to benefit from
this AI world.
I think that the biggest risk isthat everything is priced in
already.
And that everybody's in on thesame stuff and what happens when
that happens and everybodystarts selling is what we have
(05:15):
days like today.
Speaker 20 (05:16):
Yes, today definitely hurt for quite a bit
of investors.
And is a good example of how amass exodus can occur.
When everyone is invested in thesame stocks.
Moving on to another questionfrom a client.
Speaker 9 (05:30):
What, given the current Climate that we have at
home and abroad.
What have you been doing forinvestment strategy?
I know you mentioned in your,one of your latest updates on
our website that you believethat international stocks are
undervalued.
Can you please explain a littlebit more about that?
Speaker 12 (05:50):
Yes, Chris, going into this year, U.
S.
stocks were definitelyundervalued.
Normally, U.
S.
stocks trade at about a 20 to 40percent valuation premium over
non U.
S.
stocks.
However, the valuation goinginto this year was closer to 70
percent.
So that's a couple standarddeviations further in terms of
valuation premium than normal.
(06:11):
Really, it's driven by strongcorporate earnings, momentum in
global markets, more aggressivethan expected Chinese stimulus,
and global economic boost drivenby central bank easing.
You know, when I look at myranking, when I look at the
globe, some of the things thatI'm looking at is growth.
Yes, that's one factor.
I take in consideration retailsales, all sorts of different
(06:33):
things, manufacturing services,leading economic indicators.
But then on top of that.
I really tilted the number interms of the ranking either way.
One would be a reason would bevaluations.
Are things cheap there?
And secondly would be moremonetary policy.
Is the central bank helping thecountry or is it trying to slow
(06:53):
the country?
And really that was a big changein this first quarter for me is
moving away from More emergingmarket, India.
I love India.
Don't get me wrong.
It's still the strongest economyin the world.
Still number one in my ranking,but there are times where
there's big headwinds and thingsjust aren't investable.
So I think that they're kind ofguilty by association with China
(07:16):
right now.
And really the glowing star sofar this year has been Europe.
Believe it or not is very rarein the last 25 years that I've
talked about Europe as a greatinvestment opportunity, but it
certainly is this year.
And I've, I've Picked upEuropean stocks.
I picked up that exposure andI've taken a break on India and
certainly I'll come back tothat.
Speaker 13 (07:38):
And one last question for you, Scott, is I
know you've mentioned the dollarstrength and how that has been
something that's been quitestrong in the United States.
Is that something that you seegoing forward?
How would the tariffs affectthat?
Just wanted to hear yourthoughts on that.
Speaker 15 (07:53):
Yes, Chris, in many ways, the U.
S.
dollar has remained overvaluedfor some time, but economic
growth differentials between theU.
S.
and other major economiescontinue to support the dollar.
And really, typically, when acentral bank raises interest
rates, It then attracts foreigncapital, strengthening its
(08:14):
currency.
However, when the central bankcuts rates, investment returns
become less attractive and themoney leaves those type of
currencies.
And this is an interesting placeas an asset allocator right now
when determining, A, I'm goingto go buy Europe.
Okay, do I do it in dollarterms?
Or I do it in Euro and what I'mgoing to be looking for is which
(08:36):
of those currencies is going toappreciate versus the other.
Because one, yes, you'll get theperformance of the basket of
stocks, but on top of that, youget the movements in currency
and that can be advantageous ordisadvantageous depending upon
what side you are on.
You know, I can go on and on andon on these type of things,
Chris, but I think we'll leaveit here.
(08:57):
So we have something to talkabout next week.
Speaker 16 (09:00):
Well, yeah, thank you, Scott.
I know I appreciate yourinsight.
I know our community appreciatesit.
And I just wanted to take thetime now to Send a thank you to
our community for sending inthese questions.
We are eager to answer andcontinue to educate our
community as much as possible.
So please continue to send inthose questions.
(09:20):
You can send them to general atparamount a s s o c dot com.
Thank you all for listening andtuning in this week.
We will be back next week andlook forward to answering your
questions.
Thank you all.
Intro song
Speaker 9 (00:11):
Hello, everyone.
Welcome to Paramount WealthPerspectives, your go to podcast
for the latest updates on globalmarkets and current economic
events.
This is your host, Chris Coyle.
I am the Marketing Director andFinancial Advisor here at
Paramount Associates WealthManagement.
And today I am joined by ScottTremlett, Chief Executive
Officer and Chief InvestmentStrategist at Paramount
(00:34):
Associates Wealth Management.
Today we're doing it a littlebit differently.
We've been listening to inputfrom our community and we are
striving to make this aseducational to them as possible,
including our clients who arethe pillar of our community.
With that being said, we reachedout to them, ask them to send us
questions, which we're going tobe going over today with Scott.
(00:58):
First question, that was.
Inputted to us was from a personwho wanted to know, obviously
about kind of the elephant inthe room, tariffs how has that
impacted the economy?
How is it going to impact theeconomy?
How has it impacted, if any,your investment strategy?
Thanks,
Speaker 10 (01:17):
Chris.
Well, game on.
Let's tackle that elephant hereright away.
Well.
So, generally speaking, as ofnow, there has not been an
effect on the economy, but theperception of what's going to
happen in the future is reallywhat's driving the markets down
here right now.
In general, markets don't likeuncertainty.
(01:38):
And these tariffs and thereciprocal tariffs coming back
at the United States arecertainly a level of uncertainty
that makes the marketsuncomfortable.
Now, let's remember when itcomes to tariffs and inflation
to us as the consumer, this is aone time event.
Things will reprice.
(01:58):
So if XYZ product was 5 beforewith the tariff, maybe it's 6
and we can make thedetermination whether we're
going to purchase that or not.
As of right now, we aren'tseeing retail sales slowing and
this was going into this year.
I have seen revenues in thepredictions for revenues over
(02:20):
the year for corporate Americastart to decline.
And so if tariffs start to eatinto those margins a little bit
further than even what we'reseeing and what was projected
going into this year, then atthat point we could see a
deterioration of earnings, stockmarket, and everything else to
follow.
Speaker 9 (02:38):
And Scott, in light of that and kind of continuing
that line of thought, what wouldyou, if any, have sort of a
prediction for?
Year end for the market.
Well,
Speaker 10 (02:49):
going into this year, and I don't think I've
really changed my tune on this.
I really expected the S& P 500to end the year up maybe 4, 5,
6%.
And that's really just lookingat what we've gone through the
last two years.
The last two years, we've hadrobust growth.
We've had robust earnings.
We've had robust growth in termsof the stock market.
(03:12):
And that's all fine and dandy,but when it comes down to it,
Valuations in the United Statesare pretty high.
So when I'm doing my rankingsaround the globe, first I start
with the growth factor, twosides of that current, and then
there's momentum.
But secondly, I start to weightthat versus what areas of the
world are undervalued based orunearnings and what areas of the
(03:35):
world is a monetary policyhelping out those economies
instead of trying
Speaker 9 (03:41):
to slow the economy.
I got you.
And I think, as you mentioned, alot of there was a lot of growth
2022 2023 driven by techindustry.
Certainly a lot of industries.
One of our clients had aquestion asking about AI.
And I guess the tech industry ingeneral, what long term risks do
(04:01):
you see?
What opportunities do you see?
How has it changed this year?
And how is it, you know, shapingoverall in your investment
strategy?
Speaker 10 (04:08):
Well, I mean, going into this year, you know,
certainly AI is going to be withus going forward.
And there's going to be a lot ofmoney spent on AI.
Now, there's a couple differentways to play that.
One would be the chip makersthemselves, NVIDIA's,
Qualcomm's.
Broadcoms, things of thatnature, but then also you can
look at how, how is theinfrastructure going to be built
(04:31):
to house those chips, keep themcool, things of that nature.
So I was going into this year.
I looked at utilities as an areawhere you could get some growth
characteristics, and there's twosides to utilities in my mind.
One is that cheap, defensive.
Pay a dividend, don't move verymuch, kind of move just based on
rates.
And then there's the other side,which is the more aggressive,
(04:53):
more growthy style of utility,like a talent energy or
something of that nature, whichthey're expected to benefit from
this AI world.
I think that the biggest risk isthat everything is priced in
already.
And that everybody's in on thesame stuff and what happens when
that happens and everybodystarts selling is what we have
(05:15):
days like today.
Speaker 20 (05:16):
Yes, today definitely hurt for quite a bit
of investors.
And is a good example of how amass exodus can occur.
When everyone is invested in thesame stocks.
Moving on to another questionfrom a client.
Speaker 9 (05:30):
What, given the current Climate that we have at
home and abroad.
What have you been doing forinvestment strategy?
I know you mentioned in your,one of your latest updates on
our website that you believethat international stocks are
undervalued.
Can you please explain a littlebit more about that?
Speaker 12 (05:50):
Yes, Chris, going into this year, U.
S.
stocks were definitelyundervalued.
Normally, U.
S.
stocks trade at about a 20 to 40percent valuation premium over
non U.
S.
stocks.
However, the valuation goinginto this year was closer to 70
percent.
So that's a couple standarddeviations further in terms of
valuation premium than normal.
(06:11):
Really, it's driven by strongcorporate earnings, momentum in
global markets, more aggressivethan expected Chinese stimulus,
and global economic boost drivenby central bank easing.
You know, when I look at myranking, when I look at the
globe, some of the things thatI'm looking at is growth.
Yes, that's one factor.
I take in consideration retailsales, all sorts of different
(06:33):
things, manufacturing services,leading economic indicators.
But then on top of that.
I really tilted the number interms of the ranking either way.
One would be a reason would bevaluations.
Are things cheap there?
And secondly would be moremonetary policy.
Is the central bank helping thecountry or is it trying to slow
(06:53):
the country?
And really that was a big changein this first quarter for me is
moving away from More emergingmarket, India.
I love India.
Don't get me wrong.
It's still the strongest economyin the world.
Still number one in my ranking,but there are times where
there's big headwinds and thingsjust aren't investable.
So I think that they're kind ofguilty by association with China
(07:16):
right now.
And really the glowing star sofar this year has been Europe.
Believe it or not is very rarein the last 25 years that I've
talked about Europe as a greatinvestment opportunity, but it
certainly is this year.
And I've, I've Picked upEuropean stocks.
I picked up that exposure andI've taken a break on India and
certainly I'll come back tothat.
Speaker 13 (07:38):
And one last question for you, Scott, is I
know you've mentioned the dollarstrength and how that has been
something that's been quitestrong in the United States.
Is that something that you seegoing forward?
How would the tariffs affectthat?
Just wanted to hear yourthoughts on that.
Speaker 15 (07:53):
Yes, Chris, in many ways, the U.
S.
dollar has remained overvaluedfor some time, but economic
growth differentials between theU.
S.
and other major economiescontinue to support the dollar.
And really, typically, when acentral bank raises interest
rates, It then attracts foreigncapital, strengthening its
(08:14):
currency.
However, when the central bankcuts rates, investment returns
become less attractive and themoney leaves those type of
currencies.
And this is an interesting placeas an asset allocator right now
when determining, A, I'm goingto go buy Europe.
Okay, do I do it in dollarterms?
Or I do it in Euro and what I'mgoing to be looking for is which
(08:36):
of those currencies is going toappreciate versus the other.
Because one, yes, you'll get theperformance of the basket of
stocks, but on top of that, youget the movements in currency
and that can be advantageous ordisadvantageous depending upon
what side you are on.
You know, I can go on and on andon on these type of things,
Chris, but I think we'll leaveit here.
(08:57):
So we have something to talkabout next week.
Speaker 16 (09:00):
Well, yeah, thank you, Scott.
I know I appreciate yourinsight.
I know our community appreciatesit.
And I just wanted to take thetime now to Send a thank you to
our community for sending inthese questions.
We are eager to answer andcontinue to educate our
community as much as possible.
So please continue to send inthose questions.
(09:20):
You can send them to general atparamount a s s o c dot com.
Thank you all for listening andtuning in this week.
We will be back next week andlook forward to answering your
questions.
Thank you all.
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