We Favor Equities Over Bonds, Says Al Mal Capital’s CIO

The video discusses the potential impact of the Trump and Fed put options on the market, suggesting that if both are executed, it could lead to a shift in market focus from 2019 to 2020. The speaker highlights the potential for emerging markets to benefit from a weaker dollar and easing trade tensions. Despite market panic in bond markets, the speaker favors equities over bonds, expecting moderate gains and some volatility. The video also covers investment strategies, recommending a moderate overweight on US equities and cautioning against long-term US Treasury investments, suggesting cash as a safer hedge.

What is the potential benefit of executing both the Trump and Fed put options?

• The market will focus on 2019 earnings.

• Emerging markets might benefit from a weaker dollar.

• US equities will outperform bonds.

• The Fed will increase interest rates.

Why is there a modest overweight in US equities despite global opportunities?

• US equities are expected to have huge gains.

• The bond market is stable.

• There is a belief that the bond market is panicking.

• Emerging markets are too risky.

What is the expected outcome for equities according to the discussion?

• Significant losses due to market panic.

• Stable returns with high bond yields.

• Huge gains with no volatility.

• Moderate gains with some volatility.

How do lower bond yields affect share buybacks?

• They discourage share buybacks.

• They lead to higher interest rates.

• They have no impact on share buybacks.

• They encourage more share buybacks.

What is the preferred method for hedging portfolios according to the discussion?

• Investing in long-term US Treasuries.

• Using cash to avoid duration risk.

• Buying more equities.

• Relying on high-yield bonds.