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'Stars are aligned' for very strong fundamentals: Kate Nixon

Yahoo Finance's Seana Smith has a wide-ranging conversation with Northern Trust Wealth Mgt. CIO, Kate Nixon and Nasdaq CFO Ann Dennison on what investors should see over the coming months.

Video Transcript

SEANA SMITH: And we're right around record highs. I know the IPO market this year already setting new records. When we take a look at what we could expect heading into the end of the year, what's your sense of what we could potentially see over the coming months?

- Yeah, sure. I mean, we continue to see strong pipeline out there. And so if the markets hold up, hopefully the activity holds up, and we continue to see strong capital markets.

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SEANA SMITH: And Kate, I'm going to throw a similar question to you. More specifically, what are you telling your clients, or how are you advising your clients to be positioned for the remaining months of the year?

KATE NIXON: Right. So I agree with Ann. I mean, the stars are really aligned with very cheap and abundant financing, very strong fundamentals. We're just at the beginning of the earnings season. But so far, so good. We're going to hear some, I think, exceptional results from companies. So the fundamental foundation remains good.

But I guess what I would say is what I would always say coming in to the end of the year, but maybe perhaps more so this year, given the fact that we've had such extraordinarily strong capital markets, is we're advising investors to sort of get back to their goals. Let the goals drive the portfolio.

As we close out the year, it's a perfect time to look at your asset allocation and just make sure it's aligned with your long-term goals. Make sure that you're not overweighted equities right now. It's a perfect time to think about rebalancing, given the strong returns that we've had. Make sure that you have enough cash in high-quality fixed income. A lot of investors right now are getting scared of bonds.

They're afraid of rising interest rates. They're reading the front page of the paper. And they're nervous about losing value in their bond portfolios. We say, don't fear bonds. Bonds still play a very important role in your portfolio. They provide diversification and liquidity. You need fixed income.

So look at your goals. Align your portfolios. Reposition where you can and where you need to, given the strong returns we've had this year. And then we're constructive on the markets. So do that. And then hope risk assets continue to excel.