We recently had the pleasure to catch up with Christopher Gannatti, Associate Director of Research with WisdomTree.  Based in New York City, WisdomTree Asset Management is the seventh largest ETF provider based on AUM (Assets Under Management).  Christopher was gracious to spend time answering our questions about the market, about the economy, BrExit and other topics of interest to investors.

As a frequent writer, please be sure to check out Christopher’s work, which can be found at the WisdomTree blog: www.wisdomtree.com/blog.

TRANSCRIPT:

Tom: Okay, welcome back to the podcast. Our guest today is Christopher Gannatti. Christopher’s the associate director of research at Wisdom Tree Asset Management. Christopher began at Wisdom Tree as a research analyst in 2010, he worked directly with Jeremy Schwartz, the director of research. Christopher is out there communicating Wisdom Tree’s thoughts on the markets, and analyzing existing strategies and developing new approaches. Prior to Wisdom Tree, Christopher was at Lord Abbett, where he worked as a regional consultant. I’d also mention that he received his MBA in quantitative finance, accounting, and economics from the NYU’s Stern School of Business, and is a graduate of Colgate University as well. Christopher, welcome to the podcast.

Christopher G.: Tom, thanks for having me today. It’s a real pleasure.

Tom: Well we’re glad you could join us and Christopher you’re also a CFA, so I’ll kick off with this one. With all your experience now on Wall Street, have you ever seen a market that’s so baffling to so many?

Christopher G.: Tom, I appreciate that because, you know, it’s that time of the year where those charter holders and not quite yet charter holders are getting those books out and studying. I certainly remember my own journey and process there. Looking at the markets, we’re in a strange reality where you can point to these distinct events where prior to the events happeningyou would say unequivocally if this happens the market absolutely will go down. We can go … Let’s talk about Brexit. Basically almost a year ago at this point, Brexit happened, within a couple weeks market goes up. We look back at the Donald Trump election. At the time it, even though the polls were close leading up to it, we look back in hindsight and view it as a shock what happened. Maybe the markets went down in the overnight, but then ultimately went up.

The Italian referendum in December, markets went up. It seems each event that happens these days, the markets react to it and then proceed to go ever higher. A lot of people find that perplexing because it’s not as though it’s only been a year or so that the markets have been going up. The markets, especially the U.S. market, has been going up for the better part of a decade, and until more recently the U.S. market has, more or less, been outperforming most other markets out there, leading a lot of people to say, “Why would I own anything but the S&P 500 Index given ultimately what has transpired?” It created, what we feel, to be a lot of interesting opportunities, but you’re absolutely right. At times, getting some of that political commentary in there, it feels downright perplexing.

Tom: Talking about perplexing and baffling, I forget if the old adage is, is it two steps and a stumble, or three steps and a stumble? The Federal Reserve’s been on the sidelines for such a long period of time and now they finally started raising rates. There are so many opinions out there about this is, you know, they’re moving too fast or they’re behind the curve. What, in your opinion, will Yellen and her team have on equity prices at the rate they’re moving now?

Christopher G.: It’s a phenomenal question because we all can r...