Highland Capital's Mark Okada On Investing In Periods Of Volatility
Co-founder and chief investment officer of Highland Capital Mark Okada went over his fiscal concerns for the United States while discussing investment strategies for periods of market volatility on CNBC's Squawk Box Wednesday morning.
"When Bernanke did not, did not start the taper a few weeks ago…and I felt like, well, maybe this is Yellen talking," said Okada.
He said that Bernanke's move to tee up the markets in May was unbelievable. Okada compared it to hypothetically telling his five children that they were all going to the doctor to get shots, and then not going after they threw giant tantrums.
"The confidence that you loose as a parent and as someone who is, is trying to guide the company, uh, country as an adult. I mean these people are really the only adults in the room right now…and really, they really, they start to doubt the whole system," said Okada, referencing the child factor of the equation while noting that there is volatility being seen in the market now as a result.
Okada advised investors to find ways to buy good risk, but to do so with caution, "and you know, have some cash, that's fine."
"I don't… think I'm missing anything. We're having a great year. All the markets are up big, right? So it's not like you're sitting on a two percent year or you're down five [percent], you know, we're up big across the boards, so sitting on some cash doesn't feel like a bad thing to do," said Okada.
According to Okada, they've been buying bank debt and have been getting nice returns at a stable rate.
"We just, ah, finished our 20th year in the business, and um, it's been, it's been good to be doing loans that 20 years, and we did a study to look at the space, and loans really do really well in periods when the markets are fairly uncertain and often times when rates are rising," said Okada.
"I'm not really sure that rates start rising from here. I think we're going to have a period of volatility around rates. This push and pull around all of the liquidity we have in the world…and then this growth that they're trying to throw a big bucket of cold water on, but hopefully that keeps growing and we see rates rise because of that."
At the time of this writing, Jason Cunningham had no position with the mentioned entities. Visit Jason on Twitter @JasonCunningham.
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