welcome to "on the money." this is a correction coming? the global hot spot. and what you can do to protect your money. the lessons some sixth graders can teach us about investing. is betting on your own ideas the best strategy? from poverty to prosperity, the entrepreneur who says he knows the key to help the poor into the middle class. >> you hang around nine broke people you'll be the tenth. >> if the markets have you nervous, we have the best and safest way to store your cash. it's not under your mattress. "on the money" starts right now.

here is a look what is making news as we head into a new week. stocks had a severe case of the jitders all week. s&p 500 finishing at the lowest level in more than two months on thursday. the dow closing at the lowest level in more than three months. fresh worries about new u.s. involvement in iraq. but stocks rebounded on friday. the plight to safety saw the yield on the u.s. treasury fall to the lowest level in over a year dropping below 2.4%. it was big media's turn to report earnings this week and the news was general good viacom did fall short of expectations. disney did better than analysts expected and fox and time warner did as well. two big deals fell apart including a possible media merger. rupert murdoch will no longer ensue in time warner. sprint walked away from a deal

with t-mobile. walgreens will not reincorporate in a foreign country for a lower tax rates. walgreen faced political pressure after considering a move. it hasn't been a sleepily summer week. jitters about the middle east, russia. joining us now brian jacobson chief portfolio strategies at wells fargo management. >> thank you for having us. >> looking around, things suddenly feel more uneasy than they have in quite awhile. is that something you think is the beginning of a correction, brian, or do you think things improve from here? >> i think things will improve from here. what we've been seeing has been drink by agree yo politics. and fears about what it means for the companies they're investing. sanctions against russia, the tension in the middle east, is it going to lead to lower profits if are the businesses

whose stocks you own. i don't think it will over the longer term. what we're seeing now is sort of a cloud over the markets in general in terms of sentiment, i think. if you look through the cloud and the fundamentals of the businesses you're investing in, i think the picture is brighter. >> i think we're on the same page. so you have seen earnings season are companies doing particularly well. yet stocks are, you know, are off. everybody is jittery. 4% off given the tremendous bull market run. not particularly concerned. stocks are cheaper now than at the beginning of the year. as brian said, when we get through some of the near-term jitters i think the market is higher at the end of the year. >> maybe that's the point. we're not used to the volatility. we have gotten used to stocks going almost straight up. what are you hearing from clients. are they nerveg use? >> a lot are. i think we characterize it as being more of a bull market

correction. it only takes a 5% move down to get people feeling as though it was a 15% move done. you get lulled into a sense of complacency. people panic. and i think that panic is going to be temporary. >> you're right about stocks motoring along in terms what the companies are doing. it's been good news, too. then the other point, when you look around, there's not too much other places to put your money. we look at the ten-year treasury trading below 2.4%. between that and the german bund trading around 1%. what does it tell you? >> yeah, and i look a little bit differently, you know, as a strategies, which is what is, you know, how cheaper or expensive are stocks versus bonds or what is a fair value for stocks given what their cost of capital is? and the cost of capital is an interest rate. and stocks trading something more like 17 to 19 forward multiple.

they're trading at about 15 forward multiple. it means a substantial upside and, you know, you hit it where else, you know, where else do you go? once we get through some of the, you know, cloudy issues, i think that we get back to that discussion on stocks are cheap, the earnings are showing up. >> let me ask you, we're writing off the geopolitical concerns at this point. what is it that would make you reassess the idea. is there a headline that makes you change your mind? >> we've done a bunch of work on this. and by and large unless the u.s. is in some major, you know, involvement it really doesn't affect markets that much. you take a look at l tel-aviv stock exchange. it's been up. what investors do is look forward and say are they good companies and affected by the outlook? what is the future path? and the future path is fine and healthy. there are a couple of things that are problematic. the european economy is

legitimately weaker, and you're seeing that in the interest rates. that, i think, is weighing on things which is the economics. >> that did dom out of left field to see italy go into recession again. two quarters in a row declining gdp. >> things aren't completely fixed but they're getting better. i think that's the thing to focus on. the market now, if you think about the way in which investors behave they look forward. it's about our expectations. if people are expecting italy to have slow growth, what matters is what is reality relative to the expectations. i think with the european central bank coming out and saying they're willing to do quantitative easing. they haven't done the targeted term financing. >> that's talk. >> i'm going to take the opposite side look. if you look at the last time the last time mario spoke. it was telling mario, '02 right.

to your point, you have to show me the money otherwise i'm -- >> they will come september. and i think that's the key thing. it's based on -- that's what makes the market. >> you have at different perspective. i think come september when they do the first auction of the targeted long-term refinancing operations. you consider the european banks will get through the asset quality review. basically the form of stress tests. they'll be in november. you'll have banks from being a drag on growth to contributing to growth. i think there's tremendous upside potential relative to expectations in the european markets. >> brian and jonathan, thank you for being here today. up next "on the money." hear the advice write what you know? investing could be the return an approach almost so natural. fighting poverty without government help or charity. you can bank on it. take a look how the stock market ended the week.

is the average sixth grader a better investor that you are in kids may have the approach to portfolio management that pays off. buy what you know and understand the world around you. the founder and crow of motif investing. artie, thank you for being here. motif is a platform that lets you pick things you know and understand. how you feel about the world around you. you went to a sixth grade class. what did you find out? >> think of it as peter lynch. you can't pick the stocks. we went to the school in fargo, north dakota, and we were surprised. we had a tournament going on for

the business schools, and this school decided the group of sixth graders decided to compete with the college grads in a competition to build a motif. what we learned is what peter lynch told us a long time ago. keep your eyes open to the ro world around you and keep costs low. the kids were able to outperform some of the best in the country. >> they were picking things they understand. one of the kids was telling me underarmor. everyone was wearing nike. christmas was approaching. they were sponsoring the olympics. and they told me the stock was cheap at the time. facebook, something they actually weren't using that much. they're more of an instagram crew. they said kids mr. zuckerberg is a smart person. he'll figure out how to make money on the mobile device. we think it's a good time to buy facebook. >> it's interesting. it's not only what you know but the people you trust and think highly of. >> absolutely. and what we've learned through

our process of motif is investing one of the biggest mistakes investors make is don't know what they're invested in. you put money in funds you have no visibility. there's a new crew of younger generation that not only want to understand but put their values to work. you take someone into green investing they may not want to invest in shale. i think it's going to solve a lot of energy problems. it's that ability knowing what you invest in is a powerful thing. >> let's talk about some of the unusual events that have been happening around the globe. some of the themes that people are picking up on. what are some of the motives that someone could pick up on? let's say you notice the outbreak of war around the world? is there a way to invest in that? >> there is. we have a motif called modern warfare. instead of conventional warfare it is smart bombs and drones. what you're seeing used unfortunately. it's doing well. what you're seeing as a response

to the outlook on war, is there's oil prices are up. when you look at shale. we have more oil, technically, in our country than saudi arabia. the problem is getting out of our ground. fracking becoming interesting. unlike oil that is under risk because of war. u.s. oil has the benefit of rising all prices. it's not as risky. it. >> where do you think investing goes over the next decade? between motives, etf. >> we're going to see the cost go down dramatically. one of the reasons the motives do well is there are no ongoing fees. you can put as little as $200 or as much as $1 million. we talk about the compounding returns, now we're focussing on the compounding of costs. take that out. i think it's about transparency. what people don't realize when you invest in a mutual fund. you don't know what you own.

there's a lot of trust. and the next generation, the millennial don't trust as much as the last generation did. >> thank you for coming in today. up next we are on the money. is kaptd lymph the best tool to fight poverty. and why banks can help save the nation's poor. we have some businessmen with big ideas. >> nothing changes your life more than -- >> later the safest place to stash your cash and get the best return. new regulations you need to know about. bulldog: if you're like me,

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if financial literacy knowing what to do with your money and when. if it were a basic civil right, what difference would it make to our economy? john hope brian said it would make a big one. he's the ceo and founder. there are pretty grim statistics out there. something like 2% of our -- 23% of our children are living in families that are living below the poverty line. we think about everything we do to fight poverty. what is doing wrong? >> the first thing is we're define poverty. if you're making $50,000 a year or less in this country you have too much on the your mown money. that's half of america. if you have a coworker who lost his job. if your dad lost his home you feel poor. spiritually you feel poor. mentally you feel poor.

poverty is a state of mind. the same group is driving the large economy on the planet. 70% of this economy is, as you know, is consumer spending. people make $50,000 take 90 cents of that dollar and put it back in the economy. they can't afford not to. >> you said you want to take financial literacy and make it like a civil rights issue. >> it is a civil rights issue. >> how do you do that? >> president lincoln tried to do it after emancipation. after the civil war he thought the most important thing he could do was to give free slave an understanding of bank. and the bank fell in disrepair. we didn't visit the conversation for 100 years. it was dr. king. he was killed two weeks before the march on washington. which was all about races of people. my point is we never got the memo out. it's not like poor and working class families and teetering class got the memo and screwed

it up. they never got the memo. we're winging it. the largest economy on the planet is just winging it when it comes to growing the economy, creating jobs, giving people aspiration. why kids drop out of high school? they don't connect education with aspiration. >> the reason you know so much is your father was in business. you grow up in a household it's a different scenario. >> if you're wealthy you almost get it part of the ceo. why is your son in business? his mother is in it. why are they involved in stocks? daddy was looking at this show and others when they were growing up. we're role modelling. conversely. you hang around nine broke people you'll be the tenth. >> let's talk about the situation of people that don't have banking accounts. something like 9 million don't have banking accounts. it's a serious problem. how do you solve it? >> you're not going to solve it

by telling people they need a bank account. we want to become homeowners. at all levels of economic strata we're looking for love in the wrong places. we have to tie the bank account to an aspiration. in elementary school give kids a course in financial literacy, entrepreneur ship, self-help, in what 25 businesses you ku start for a $500 or less. think shark tank for kids. when they get two minutes. that's life and they pitch and win we fund the business up to $500. >> it's not just talk. >> we're doing. >> how many locations now? >> just 5117. we have 100 locations in 251 days. it's the private banker for the working poor, the struggling. and we're putting them inside

the bank locations. we're in sun trust banks. we're at pnc bank, bank the west, five branchs in new york city. and banks are not doing it out of charity. they're doing it because we're raising credit scores 120 points. nothing changes your life more than god or love is moving your credit score 120 points. the people who are driving the largest economy on the planet need to be included in the largest economy on the planet. and growing our middle class is the whole ball game. >> i want to thank you for joining us today. >> thank you for keeping the issue alive. thank you. up next on the money, a look at the news for the week ahead. and cash is king. if you have plenty of if t, where is the safest place to park it? we have the answer when we come back. visit tripadvisor new york.

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for more on our show and guests you can go to our website otm.cnbc.com. you can follow us on twitter. a big week of earnings for the retail sector. we'll hear from walmart, jp penny, kohls and macys. facebook will shut down the gift service after two years. retail sales for the month 77 july on are due. friday we have the producer price index followed by the industrial production member numbers for july.

and one of the seven modern wonders of the world. panama canal will be turning 100 years old. millions of investors use money market mutual funds to stash cash. they're generally viewed as safe convenient short term investments. there are changes on the horizon. personal finance expert joins us now. >> money market mutual funds have grown so popular. they park nearly $3 million in the investment vehicles. since the financial crisis regulationers have been frightening regulations to ensure they're safe. they will not go into effect for two years. now is a good time for investors and consumers to decide if the funds are truly the best place to stash their cash. >> all right. let's talk about the different types of money market funds. i bring this up because i was overhearing advice in a bank recently. i was giving the guy a hard time. i think he was wrong and i was right. not every mutual fund is right. >> you hear the term money

market and you think everything is the same. they're very different. there are money market mutual funds that's what the new rules securities and exchange commission has addressed. there's a money market account. that is a bank account. it's like a savings account. you have the money market mutual funds which is an investment vehicle and the money market account which is a savings account. >> the fcc rules only impact which one? >> the fcc rules only impact the mutual fund. the money market mutual funds. they have two provisions. one that looks at the institutional money market fund and the underlying value of the fund. they want to make sure people understand what it's truly worth and they're going to have a loading value now for the funds. >> they will trade like mutual funds. or $1.03. >> and that's a very big consideration. the whole risk idea is part of what the breaking the buck idea is about.

and a run on the bank. that's what they're worried about. >> that's something we tested during the financial crisis. that's part of the reason the government had to get involved. people started pulling their money out quickly. people had to say we'll cover you. >> taking the withdraw is another provision of the new rule. that's moving in all money market mutual funds saying there's certain restrictions when they can be taken. they'll probably be restricted to the dire times. >> how do i figure out what is right for me? >> you need to figure out what you're going to use the money for. keep in mind the money market mutual fund is for investments. if you want to have money cash on the sidelines. a lot of folks want that in the portfolio so they can take advantage of the market when it happens. it'll be right there in the portfolio ready to make that move. if you want savings for the short term, that is what a money market account is for at your bank. it's a little bit better than a savings account in terms of the yield you get.

it invests in some other things like treasuries, cds, and short term. >> that's protected bit fdic. >> that's the key point. if you want to keep your money safe, you want to make sure you have it in a money market account at the bank or a savings account and it can be insured for deposits up to $250,000. >> thank you for clearing up the complicated question. >> sure. that's the show for today. thank you for joining me. next week we're taking on the success. have a great one. i'll see you next weekend. bulldog: if you're like me,

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get 48 months interest-free financing on the entire tempur-pedic cloud collection. not to labor the point, but this sale won't last long. ♪ mattress discounters [ticking] >> in a nondescript t-shirt at a nondescript desk, mark zuckerberg runs a vast global empire, leading the whole internet in his direction. is the goal for you to conquer the whole internet? to own the internet? >> well, think about it like this. people--if they can use a product of any category--photos, music, tv, anything--either by themselves or with their friends... >> mm-hmm. >> i think most of the time, people want to do those things with their friends, so-- >> so is the answer "yes"? [ticking] you describe bill gates in very harsh terms.