Jimmy Lee, CEO of Wealth Consulting Group, joins Cheddar News' Closing Bell, where he explains why he and his firm remain bullish on the market despite the volatility brought on by the Russia-Ukraine conflict and rising inflation.

Closing Bell

Stocks Close Mixed, But Major Indexes Clinch Second Consecutive Winning Week

But let's turn back to the major indexes joining me now is jimmy lee ceo of wealth consulting group. Jimmy, thanks so much for taking the time we had a mixed market today looks like you got a packed house behind you, but still ending higher technically for the week. What do you make of this week's market action? Well, Kristen, I'm very happy to join you with a different back shop today. This is our firm's annual conference with advisors that are affiliated with us. So we've got 50 plus advisors behind me, affiliate with the wealth consulting group that are responsible for billions of client assets and what we're seeing. I think this week is more beyond the war. That was that, what's going on in Ukraine and more about the Fed, obviously Chairman Powell's, You know, speech that had, that he had, um, last week was a little alarming to some in terms of that we could raise rates quicker, maybe 50 basis points or even higher. We'll do whatever we need to. So I think he's giving himself and his committee a lot of room to make changes when they need to. But the consumer is strong. The consumer, strong earnings have been strong and uh, we have to look beyond the war. And I would remind the viewers out there that in the past Fed tightening cycle since 1919 82 equities were a great investment to own. And every time period stocks actually went up. And so I think that's important to focus on the long term and of course rates are still near historically low levels. Even if we do see more aggressive rate hikes to the tune of about half of a, of a percentage point here, um, at this next meeting, we've got a packed house of advisors behind you jimmy. What are you advising clients do right now to navigate still murky waters in the sense that yes, the Fed is raising rates, but maybe bigger picture than that when it comes to risk is Russia's continuing invasion of Ukraine. Well, we don't get to to do it very often because we don't have corrections and bear markets that often, but every 1 to 2 years and we have a correction or 3 to 5 years and we have a bear market, we get to do our jobs as advisors and, and really focus on and message in this conference is about investor behavior. We talked about that all the time. And it's really important now that investors show patients and that advisors are proactive with communicating with their clients and whether it's taking the phone calls or holding hands or whatever needs to happen to focus on the long term plan. The investment plans that were set up with the advisors. So you know, we see the statistics all the time with investors underperforming their investments. It's not because of fees, it's because they buy high and sell low. So when we get the opportunity during these corrections and bear markets. That's when we get to shine as advisors. And so we're very grateful to have that opportunity in this room. What are some sectors or even stocks jimmy that look attractive to you right now knowing that it is an opportunity to buy the dip for some of your clients. Well, we've been overweight value economy opening cyclical, cyclical sectors for a while now, including energy financials. We added two commodities recently. Even though that we've had a run in oil and gas and other commodities recently because of the war, we added more as a balance to the other parts of our portfolio. So we like the value type stocks. Some of the sectors I mentioned already, including materials, financials, energy or overweight. But I personally also think investors will get back into the big mega cap tech names, the big growth names that have been a big part of why the indexes have gone up so much over the last five years. But this time around, I think investors will be much more cautious on some of those tech names with high valuations without the quality earnings. So I think we're going to be very careful of, of warning our investors to not go back into those names. What about semiconductors? Because we saw that sector jumped the most yesterday. NVIDIA A. M. D. Some of the best performers on the session as technology names yesterday did outperform and I think we've had several market guests on this show, agree with you that there is some opportunity. Um, I'll be looking at these names carefully in the technology sector. The semiconductor shortage still very much a thing. Supply chain issues. Still very much a thing. Higher price is still a reality. Do semiconductors look attractive to you? I mean as a sector, I think they do just because demand, the demand supply situation is what it is. Um So in the short term I think you just have to be careful to not be too overweight in any one sector. But in semiconductors as you know, being a very volatile potentially asset class or sector, just be cautious of not getting too much of your portfolio invested in some of those areas. So it's really important now for investors to do you know, a really good X ray with their portfolio to make sure that, you know, they're invested and they're diversified and they're not too concentrated in certain areas like tech. And so as we know tech being a sector that's gone up a lot over the last decade and will continue to perform well. Some of those names trading at extremely high valuations have incredible volatility. So if you're invested in some of those names, just be aware that they can go down as fast as it can go up. Okay, let me ask you this. Um, it's been almost a month to the day that Russia invaded Ukraine, that invasion still ongoing. As we've been discussing at length here on closing Bell and cheddar news. However, the stock market has recovered all of the earlier losses when that invasion started, technically we're now positive during this one month invasion span. Do you think that that's behind us that sanctions a united front with president biden in europe right now is giving investors confidence that Putin can be reined in and that of course inflation, the global supply chain prices at the pump will be managed as this invasion continues? Well, I think we have a lot of uncertainty still regarding the war. So I don't think, I don't think the full story has been told yet and it may still be months before we know how this concludes. As far as the world economic situation is concerned, we know that Russia Ukraine, um, represent a very small percentage of the world GDP. But in terms of, uh, you know, commodities such as oil and how it affects their trading partners in europe, especially it can have a major impact on the global situation economically. So I'm not sure we're out of the woods yet, as far as oil goes, I think it's still gonna be volatile, um, throughout the remainder of this year. And so, um, I think while investors are hopeful, um, I think with commodities and with the war, it's still very uncertain. So I think we can get a lot of volatility until some of these uncertainties go away now april is is now on the horizon. And investors are going to start talking to their accountants about filing tax returns. And one of the big surprises is that there's gonna be no tax hikes. We've been talking about tax hikes, both at the corporate individual levels and and we're not gonna have any. So I think that'll be a bullish sign, at least in the near term investors to continue to be bullish on the economy. Alright, jimmy. We're going to leave it their second straight winning week for the S and P 500 jimmy lee ceo of wealth consulting group, We appreciate it.