As the new Omicron variant spreads and market volatility increases, Fox Business’s Claman Countdown recently spoke with AlphaCore Wealth Advisory CEO and Founder Dick Pfister, CAIA for his latest market insights LIVE on Friday, December 3, 2021. Appearing in the Countdown Closer segment toward the end of the hour, Pfister gave viewers his perspective on recent market performances and dispersion of various stocks, starting with Carvana’s (CVNA) sudden drop.
“We typically advise on diversified portfolios, but there have definitely been some story stocks that have taken off over the last 18 months, and we think Carvana is one of those,” Pfister tells Claman Countdown’s Lauren Simonetti, who was filling in for host Liz Claman. “It’s got about a $42 billion market cap. That is actually higher than or equal to Honda, Hyundai and Kia, and those companies actually make cars.”
While Pfister is cautious about Carvana, he remains optimistic about the Blackstone Group (BX) and other investments that can act as alternatives for investors seeking proper diversification.
“The world of 60/40 that investors used to invest in was made up of stocks and bonds. In today’s low-rate environment, you need to look for a third leg of the stool, which is alternative strategies,” Pfister explains. “Blackstone is the preeminent alternative strategy manager in the space. They give investors access to private equity, private credit and private real estate.”
Despite Blackstone’s recent tear, Pfister believes that their dominance in the alternative space leaves plenty of room for future growth.
“I think they are set up really well for this environment where investors are seeking yield to overcome inflation,” he adds. “With traditional treasuries and traditional muni bonds, after inflation, their yield is so low that you have to go look for different areas to capture yield or diversification in noncorrelated returns.”
Overall, Pfister believes that the markets this week have been a perfect example of volatility increasing as 2021 comes to a close – which is not necessarily a bad thing.
“If you look at the volatility of the market in the last couple of weeks, last couple of days, there’s just uncertainty,” says Pfister. “Things like Omicron and the Fed tapering caused uncertainty for investors, but what that does is create opportunities for active managers.”
AlphaCore does not actively allocate to Carvana Co. (CVNA) or the common stock of Blackstone Inc. (BX). The commentary represents the current views and opinions of AlphaCore Capital, and there is no guarantee that any opinions will prove to be accurate, or any forecasts made will come to pass. No obligation is undertaken to update any information, data or material contained herein. This material is not intended to be relied upon as a forecast or investment advice, and do not constitute a recommendation, offer, or solicitation for any specific security or any specific investment strategy, as AlphaCore provides investment advice only within the context of our written advisory agreement with each AlphaCore client. It should not be assumed that any strategy or investment recommendations or decisions we make in the future will be profitable. Past performance is not indicative of future results.