Ted Oakley: Americans Are Dangerously Vulnerable To A Stock Market Correction

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**Adam Taggart** (1:00)
Household stock ownership is basically at an all-time high percentage. Right? So you've got stocks very richly valued, as you just said, and you pretty much got everybody in the boat at this point in time.

**Ted Oakley** (1:15)
You know, everybody's in. And the reason I sent you this chart is because we overlaid it with debt to GDP. You know, you got a lot of debt, you're going to choke down the economy and choke down the GDP. You have to, because you had too much debt. And individuals can't see it. They just keep buying the indexes and pushing more money in the market. And if you look at the largest ownership in 401Ks, it's the people that are 50, 60, and 70 They have all the money. And I feel for them in some ways because I don't think they're even thinking about, well, what could happen if I have something serious take place here?

**Adam Taggart** (1:57)
Welcome to Thoughtful Money. I'm its founder and your host, Adam Taggart. Dazed and confused is how a lot of regular investors are feeling right now. Stocks have bounced back from their April lows, and optimism is back on Wall Street. I've certainly interviewed several experts who are feeling pretty bullish right now. But that doesn't mean there aren't reasons for concern, technically, fundamentally, as well as on the macro level, especially when major news bombs are dropping in the headlines nearly every day. How's the average investor supposed to navigate such a chaotic market? For seasoned expertise, we've got the good fortune of welcoming back to the program, high net worth financial advisor, Ted Oakley, managing partner and founder of Oxbow Advisors. Ted, thanks so much for joining us today.

**Ted Oakley** (2:43)
Glad to be here, Adam.

**Adam Taggart** (2:45)
Well, very glad to have you here, Ted. Lots to talk about both in terms of what's going on in the markets, as well as there's one or two things that your firm and mine are cooking up in the near future for folks. We'll get to all that, but there's a lot of wood to chop between now and then. Why don't we kick it off with the direct question I've been asking a lot of guests recently. I'd love to hear your answer to this. Was the market drop that we saw in March and April, was that just a correction in an otherwise still intact bull trend, or was the rebound that we saw in May, a classic bear market rally, one that's perhaps poised to roll over and just pull the rug out from under investors?

**Ted Oakley** (3:26)
Well, we said for some time, Adam, that we started saying this a couple of year or two ago, that we thought this decade would be one where you would just go up and down a lot. You would even maybe make new highs, but then you'd give it back and then you make, it'd be one of those where you wouldn't be in a brand new bull market. Even if you went up 20 percent or something, you're not in a brand new bull market because of valuations.
So, it's not surprising that this happens, because individuals and everybody else is trained to it. Let's buy it when we can, because we're going to go right back up. And in their minds, at least, it always happens that way. So, these swings probably will be indicative of what you'll see the next three or four years, in my opinion.

**Adam Taggart** (4:14)
Okay. So, in other words, you think that we're sort of in a volatility channel, where there's going to be swings up, swings down. But it's not necessarily going to be a defined trend, perhaps one way or the other, bullish or bearish.