Ellen Braitman on AOL's MarketTalk - TheStreet

Ellen Braitman chatted on AOL MarketTalk, Monday, Jan. 8 at 3:30 p.m. EDT. AOL's MarketTalk is hosted by Sage Online (Keyword: PF Live).

Online Host:

Live from New York, N.Y., please welcome Ellen Braitman, senior editor, markets,

TheStreet.com

, Inc. Ellen can answer questions about personal finance, investing basics and market moving news. Visit Keyword: TheStreet.

SageMoola:

Welcome to MarketTalk, Ms. Braitman!

Tscellen:

Hi everyone. A belated Happy New Year!

Question:

Given the likelihood of further rate cuts, do you see opportunities in junk bonds?

Tscellen:

Surely, junk bonds are becoming more attractive to some investors. But investors also need to watch out for the fact that some companies are going to have a harder time paying back their loans.

Tscellen:

Junk bonds, of course, are bonds issued by companies that have below-investment-grade ratings from credit agencies.

Question:

Do you think the bond market is in for a major plunge in the near term?

Tscellen:

All the markets have been swinging wildly these days. And we saw bonds move a lot after last week's surprise rate cut. It seems that many folks do expect the Fed to cut rates again.

Question:

Would you be a buyer of tech companies currently?

Tscellen:

I'll answer about tech in general. At

TheStreet.com

, writers and editors don't buy individual stocks.

Tscellen:

Many see value in tech since so many stocks have lost so much value.

Tscellen:

But many valuations are still so high. That is to say, many tech companies still have very high price-to-earnings ratios. I think tech investors today need to have a long-term perspective and a strong stomach.

Question:

Do you think this will be a good lesson for most young people who think they can be millionaires before 30?

Tscellen:

If you're talking about how much stocks have come down since last spring, then yes. This period has been a great reminder that stocks are volatile investments. Remember, it wasn't long ago that we all believed stocks regularly returned 10% a year -- not 30% or more a year.

Tscellen:

So this downward spiral has been a powerful lesson to folks who only knew up markets that, to be sure, stocks rise and stocks fall.

Tscellen:

With investing, there are no sure things that can make you a millionaire.

Question:

Where do you see the QQQs three to four months?

Tscellen:

QQQ is a proxy for the Nasdaq 100. Of course, no one knows what will be in three to four months time. Many investment pros believed that last week's Fed cut helped put a bottom under stocks.

Tscellen:

But stocks have been dropping since the day after the rate cut.

Question:

What market opportunities are there currently?

Tscellen:

Value investing is coming back in vogue, as investors realize that many companies won't always be growth-growth-growth.

Tscellen:

Someone earlier asked about junk bonds. I think the questions show that in different markets there are always different investments that may come back into favor or begin to outperform.

Question:

Given market uncertainty for next several quarters, would you take profits, revert to cash, and wait for changing climate to invest?

Tscellen:

It's important for investors to always have a good handle on why they are investing.

Tscellen:

Someone who has money that is needed, say, for a downpayment on a house, wouldn't want to take any risks if he or she needed that money in anything less than two or so years.

Tscellen:

So, instead of telling investors whether they should take profits or keep cash, I'd suggest that investors always make sure that their investment goals match up with their investments.

Question:

Has oil production increased to the point at which prices will come down?

Tscellen:

There is a big meeting of

OPEC

, the organization of petroleum exporting countries, coming up. One reason prices have skyrocketed is because the global economy had gotten stronger, demand had increased, and supplies were limited given the demand.

Tscellen:

I think we're going to continue to see high prices.

Question:

What are your thoughts on last week's surprice rate cut by the Fed?

Tscellen:

The rate cut definitely took me by surprise. No one really thought the Fed would cut before the December jobs report was released on Friday. But I do think the Fed is trying to make sure this incredible period of economic growth doesn't come to a crashing halt.

Tscellen:

Like many people, I'm very curious to see whether and by how much it may cut again when it meets on Jan. 30 and Jan. 31. And I'll be especially interested in the statement it puts out about its views on the economy.

Question:

When do you think we will see the bottom of the Nasdaq?

Tscellen:

That's the million-dollar question. Again, last week, some folks thought the Fed had helpd to set up a bottom for the markets. But I think we're really going to have ...

Tscellen:

... to get through this earnings season, see how many companies miss reduced estimates and what the companies say about their outlook for upcoming quarters.

SageMoola:

Thank you very much for joining us today, Ellen!

Tscellen:

This was fun, as always. I look forward to chatting again soon.

Tscellen:

Thanks for logging on.