A Former NYSE Trader's Advice to Investors During the Market Selloff

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It's been a rough week in the markets.

Here's what investors need to know about the markets from the perspective of a former NYSE trader.

Stephen Guilfoyle, Real Money contributor, joined TheStreet to discuss what he's doing in this market, and give investors some advice.

Video Transcript:

Katherine Ross:
I'm Katherine Ross and I'm here on the floor at the NYSE with Stephen Guilfoyle, RealMoney contributor. I gotta ask, what are you doing right now?

Stephen Guilfoyle:
Well th- nothing's easy right now, a- a- basically, well what I would f- the first thing I would tell to novice or less experienced traders is in times of strife, you really wanna narrow your focus. You wanna be thinking about less items. So it, I mean, yeah, it's too late to, it's too late to save you some money at this point but when you're, when you're feeling confident, that's when you can tackle 15 or 20 positions. When you are are feeling less confident and you really gotta focus on what you know and what you don't know, that's what you want to focus on.

Stephen Guilfoyle:
I heard a professional trader the other day say he was down to four positions, I won't name him but you all heard of him. And for me, that number, I'd like to get it down to about a dozen when I'm, when I'm feeling like maybe I just really need to bare down. Uh, I, I'm obviously not down there yet, uh, (laughs), no, I, I've had three plays going. I've had the rebound play which is the growth names that you all know and love and I've whittled that down a good bit, uh, that one's not doing well. (laughs) I've got the, the revenue play whish is the dividend names, that one's not doing well either, but at least they're gonna pay me, I hope, when we get around to, uh, to the, uh, to the ex-div date and beyond.

Stephen Guilfoyle:
Um, now the other, the other play's doing pretty well, all right, now that's the virus play. And you know that's, that's the Gilead and the Moderna, uh, that's, that's the, uh, the Teladoc and Aviva, uh, and it's a couple of other names that, that just tend to do better like the, like the w- say home j- uh, stocks, like Zoom and Slack, I'm on both of those, and Clorox, you know, so I, e- you know, it's a, it's a nice little book that has really, and some of them are doing really well but in aggregate it's really moving sideways while the rest of the market's getting annihilated so I like to look at that book. (laughs)

Katherine Ross:
So let's look at it, we've got the DOW down about 1900 points as of 2:32 PM today, what should investors watching this video be doing? What's your advice to them?

Stephen Guilfoyle:
All right, well you do have the Fed next week, all right, when a lot of people got really excited today they thought the Fed was doing quantitative easing, they ran the market up, they ran the market down. All right, these are repurchase agreements, not [inaudible 00:02:06] size. What, what happened, what, what we saw the last couple days was a lack of liquidity in the bond market and, and in d- r- particularly in the treasury market and that caused risk managers to force portf- force portfolio managers to sell risk rather than lay it off somewhere. So that's why you saw exacerbated moves to the downside not just in US equities but across the financial sphere.

Stephen Guilfoyle:
Uh, now, the Fed is tr- e- the Fed understands what's going on here, in fact, in fact, I think that your old pal might be the only guy in the financial universe that, that, that understands right now that we are about to fight Satan, all right? The other guys seem to be way behind on this. We do need treasury to get on the ball, we do need a fiscal stimulus package. It's not really treasury's fault right now because our legislative bodies aren't agreeing on this, but we obviously, I think Mitch McConnell said they're gonna stick around next week, boy that's good news because we really need this, like, three days ago. Uh, and, and as you see in your communities, social distancing is going to cause a tremendous lack of demand, which, moving forward, will also cause a lack of supply in service sector industries, and if that hits healthcare, I mean, i- i- there's a lot to worry about folks.

Katherine Ross:
All right. Thank you for that.

Stephen Guilfoyle:
(laughs) You're welcome.

Katherine Ross:
Guys, thanks for tuning into thestreet.com and for more market coverage you know where to go.

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