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Gary Quesenberry: Welcome to Monthly Market Talk. We’re in the thick of an election
season. The naysayers speak of impending doom thanks to a looming fiscal cliff on the horizon,
and yet the markets are performing well. Are we in good shape or bad shape? Will the American
economy go Wile E. Coyote off of this cliff? Vice president of USAA investments, Wasif
Latif, is here to set us straight. Wasif, September wasn’t that bad, was it?
Wasif Latif: Actually, Gary, it was a very good month. For the year so far, the S&P is
up in double digit territory, and really the strength was driven by anticipation of the
quantitative easing that came from the Fed. In addition to that, the Europeans have indicated
that they’re on the mend in trying to address their sovereign debt crisis, and then lastly,
the housing market seems to be showing some signs of stability. So all those combined
and made for a really good month.
GQ: Now, about that cliff. Are we or should we be concerned?
WL: Well, there is cause for a concern around the fiscal cliff. There could be some headwinds
in the market and some volatility coming back through the rest of the year as we continue
to deal with that ultimate challenge. Lastly, in Europe, Europe can also be a cause for
concern for the rest of the year because they really haven’t addressed the challenges
that they have in dealing with the crisis. If they can recognize that this is a banking
crisis and not necessarily a sovereign debt crisis, they can be on the mend as well.
GQ: There’s gonna be a lot of experts out there trying to offer their solutions. Help
us cut through the clutter, Wasif. What should the investor do?
WL: Well, in our portfolios at USAA, we try to focus on our themes of quality, growth,
income, and inflation protection. Quality comes from large cap stocks in our portfolios.
Income comes from municipals or high yield. Inflation protection comes from high dividend
paying stocks, and the growth really comes from emerging markets. So we invest in that
manner. As far as the investors, it may not be wise to make kneejerk reactions immediately
based on what is going on in the news flow and really should focus back on their long-term
plan, their time horizon, as well as their risk profile.
GQ: Thanks, Wasif. And we cannot stress enough the importance of a plan. If you have one,
it’d be a great time to review it. And if you don’t have one, now would be a great
time to start. You can get the ball rolling by calling us to speak with an advisor or
visit us at USAA.com. Thanks for watching.