karina led the life of dorm dining halls and classes and they're also pushing themselves be well beyond that. when they do, they move us all forward. that's what earns them all spots on the nest list. thanks for watching. i'm dr. sanjay gupta. a few more jobs added in march and a bull market on wall street appears to stall. you're not ready to celebrate just yet. this is your money. another month, another gain for jobs in america. still not enough. only 88,000 net jobs were added, much fewer than the 288,000 added in february. meanwhile, the unemployment rate did fall slightly, but that m n means were looking for work in march. regardless, they're keeping with their 37-month strend of private sector job growth in the country. these numbers are disappointing. should we be worried about something bigger? >> is it a blip or a long er tem

reversal of early year strength? that's what economists are arguing about. you look at the trend. we saw the past few years. strength in the first part of the year, a pull back at swoon. it's something the fed chief warned about earlier this year. you talk about the unemployment rate dropping. it dropped because 496,000 people dropped out of the labor force. the participation rate now the lowest since 1969. >> let's be careful about the unemployment rate. it measures a moving target. it measures those people who are participating in the labor force. it's a smaller percentage, but it's measuring a smaller overall number of people. >> that right there is the participation rate, the people in it. a few bright spots. professional business services added jobs, so did health care. >> which we always do. >> but we saw losses in retail. they're discussing whether you have seen the expiration of the pay roll tax holiday that didn't have an affect, maybe it was

starting to bite, and that could be reflected in the retail jobs or maybe there's some reason, sequester talk, all kinds of things happening in the economy, europe, that people are feeling less confident and that's translating into fewer retail jobs. there's something called the underemployment rate. 13.8%. slight improvement, still too, too high. that's the number that people call the real unemployment rate. that's people who aren't working or are working part time but would like a full time job. even if housing, the stock market, the economy technically recover, until you have that number down and more people enjoying it, people aren't going to believe the recovery. >> they're not going to feel great if they don't have the job or income or the benefits they need because the money that would otherwise be in the economy is being spent on necessities. joining us is the chief economist in chicago. muhammad alarian, one of the largest investors in bonds, and steven moore, editorial board

member at the wall street journal in washington. this is an all-star cast because the question we've got for you this morning is one i asked christine, steven, stocks hit record highs in the last month. job hires are slowing down. companies are still flush with cash. the private sector has been adding jobs for 37 months in a row. they need to add more. americans themselves are hesitant to celebrate. the last time that the stock market with these levels, the economy felt good and strong back in october of 2007. it was crumbling, but it felt good. why is this different? >> you know, wall street is doing really, really well. no question about it. 2013 has been a record year so far. glad to see it, most americans are investors so they're feeling that in their wealth. main street not doing quite so well. you see this hesitancy in terms of spending, for example, one of the real reasons that retail sales were down. here's the point that i would make about christine's question about is this just a bump in the road or, you know, are we seeing

a long term trend that's disturbing? i would say the big disturbing trend is that this decline in the labor force wasn't just this month. it's been happening now for four or five years. if we had had the same labor force participation rate and the same kind of job creation over the last four years we normally have during a recovery, we would have about 4 million more jobs. that means every unemployed person in pennsylvania, ohio, indiana, and illinois would have a job today. so i still think the labor market is weak, much weaker than it should be. >> mohammed, jobs are coming back. they have been coming back every month. 88,000 plus is better than no jobs or losses, but we have been talking about how many jobs need to be created to keep things going. markets are worried a little bit about this pace of job creation. company valuations are still very attractive compared to the last time markets were at these levels. companies are relatively cheap, and there are many people saying this bull market could have room to carry on.

why are people still skittish? i guess stephen's point that many americans, probably half, are not invested in the stock market, but why is everyone not feeling this is an opportunity? >> so you have this amazing mix of excitement and anxiety. excitement because the stock market has done well, 401(k)s have done well, but anxiety because people have a sense it's artificial. it's artificial because it's not being validated by the economic numbers and the employment numbers speak to that. what is it is validated by is bank hyperpolicies making people nervous. people are looking at if and saying it feels good in terms of the stock market, but this is maybe artificial because we have yet to see this handoff from central bank policies to genuine growth. >> the handoff is an interesting story, diane. that's the issue, not that anyone thinks the fed can do this forever. $85 billion into the economy, and they said so themselves, but the handoff is as if you're

taking a patient off life support. you don't believe it until you believe the person is going to live, unless you're not expecting that to happen. how does that work? at what point does the fed back off and the growth doesn't feel artificial? >> that's the important thing. charlie evans addressed that point yesterday exactly and said listen, if we thought the stock market was going to collapse and the economy wasn't going to be sustained, we would back off. it's their rule at this point in time on the federal reserve. so he was really pointing out that i think this number validates that the fed will continue to add to its balance sheet as long as it continues to add to its balance sheet and keeps it steady at a high pace, even if it doesn't add at a high level, that's stimulative to the u.s. economy and that will continue well through this year and into next year as well. the vice chairman of the fed has also noted that the balance sheet could be stable for a long time. even until they start raising

interest rates. they're looking at it in the same way, saying we are propping it up, but we can't pull the plug yet because this situation, it's still life support for the economy. i will note on the jobs, the composition of the jobs numbers which was really important to the fed, and even in health care, in-home health care is a very low-paying waej job, and the composition is not the quality, and colder than usual spring weather really did hit retailers. we had record vehicle sales and it takes more confidence to buy a car than an outfit. there was a cool weather effect. we have the head winds of the sequester ahead of us. >> the car buying has to do with the fed. the people who want car loans, americans like to buy cars on borrowed money, and you could now get the loans you couldn't get a few years ago. conservatives, and i don't know where you stand on this, but there are some conservatives who say let's get the fed out of this. it's created false prices.

and you dont get a real sense of what this economy would look like if it were not artificial, as mohamed says, but there would be dire consequences if the fed decided to pull its $85 billion a month out of the economy, don't you think? >> it's a great question, and the question that conservatives like i have. and by the way, a lot of american consumers and a lot of investors. i get this every time i talk to an investor group. how does the fed stuff that genie back in the bottle? it's easy to print money. it's easy to get the printing presses revved up. it's not so easy, we know this lesson from history, not so easy to pull back. i agreed with what mohammed said. there is a kind of fundamental anxiety that maybe this economy is built on sand, not stone, and one of the reasons is because of easy money. i would also make the case that this enormous debt, a great nation can't continue to borrow a trillion dollars year after year. that's not just me saying that.

that's the guy on the street. >> the debt is narrowing right now. it's one of the great myths that the deficit is narrowing at the moment much more rapidly than anyone thought, so fiscal drag is an issue, but the deficit is going in the other direction right now, which may be also one of the factors contributing to lower interest rates. it's kind of an interesting undercurrent that most people don't talk about. >> the debt discussion is important, the long-term, the debt discussion is so important, but i would take issue with stephen moore because right now, the very right now is jobs. a job, a job, a job. your jobless rate is either zero percent or 100%. you could argue about the politics of cutting or spending but people more than a philosophical conversation about whether you should be in dent or not in debt, they care about a job. >> fantastic conversation with a fantastic panel. stephen and christine, thank you. diane, stay with us. president obama insists the forced budget cuts wouldn't happen. he also promised to create 12

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12 million jobs, that's what president obama promised during the campaign. the economy added only 88,000 jobs in march missing expectations by more than 100,000. that's definitely not enough to meet the president's promise. now i was skeptical when the mitt romney campaign and the barack obama campaign said that it could be done. so skeptical that i wagered it wasn't likely. not with economic growth as

sluggish as it was during the campaign and may still be. so before the election, i pledged i would wear a dress if 12 million jobs were created over the next four years, just for a week by the way, under any president and whether or not i plan to honor that pledge, i'm constantly reminded of it. as crazy as it sounds, i would like to lose my bet, not because i want to wear a dress, much, but i do want a lot of jobs to be created. you heard me say that presidents get all together too much credit and too much blame for creating jobs, but the president did make a promise. so let's see how it's going. and remember, it's got to go over many, many months, but we're two months into president obama's second term, so the economy should have added 500,000 jobs. the economy has added 356,000 jobs in february and march leaving a shortfall of 144,000 jobs. i want to bring in alan krueger, the chairman of the president's council on economic advisers. alan, welcome to the show. you said the automatic spends

cuts that washington calls the sequester would slow economic growth and job creation. think back to the campaign when the president made his promise to create 12 million jobs. he said very clearly, the sequester would not happen. given that it's happened, has he revised his projection about the 12 million jobs? or have you revised your projection about the 12 million jobs over the next four years? >> what we have done is to try to remove the sequester. the sequester shouldn't have happened. it's bad policy. it's cutting key investments, causing a lot of pain in the economy. it's going to hurt us in the long run because we'll be investing less in research and development, and it's not going to solve our long-run deficit problem, so the president remains focused pursuing the policies that will speed up job growth. >> when you look at the 88,000 jobs gained, you can't be happy. you can't be happy about it. >> i try to take a longer view. we have added half a million

jobs over last three months in the first quarter of this year. the economy is moving in the right direction. we need to avoid the kinds of self-inflicted wounds like the sequester that's going to slow down the economy. >> on that we agree. i also do like to tell people that i just think it's unfair that they put this all on the president in good times or in bad. what role exactly can the white house and the administration have in job creation? you don't really create jobs. frankly, we don't want an economy where the administration and white house is directing the creation of jobs. so what are the right things the white house can do? >> very good question. what we can do is create the environment that is conducive to job growth. that means investing in research and development. that means investing in infrastructure so companies are competitive. it means providing workers with the right set of skills needed for a modern economy. it means getting our fiscal house in order. it means doing this in a way that doesn't create manufactured crises that have been slowing

down the recovery. >> that's the one area you have influence in. making sure we don't have manufactured crises. given the experience of the first two months of the second term of president obama's office, are you looking at this differently than your predecessors did in the first term to say we can't get into this roads where we get into a stalemate with congress and nothing gets done because americans don't like it and it's bad for the economy. >> i disagree with you on the first part of that. i think the president can influence the economy in all those ways. what you'll see in his budget next week is a plan for the economy. a plan to invest in our infrastructure and make us more competitive and workers more highly skilled. and to make manufacturing more competitive while at the same time we address our fiscal problems. >> the elusive budget. april 10th, i think you guys are putting that out and hopefully we'll get something done through congress. alan krueger, thank you very much. he's a senior adviser to the president. want to bring in kevin hastic. he's a senior fellow and director of economic policies at

the american enterprise institute. he was one of the major authors of mitt romney's economic policy. joining us again is diane and mohammed. kevin, good to see you in person here. you made the same predictions that president obama's team did. it came from you guys first. alan krueger says he wants to take a longer view. we're not expecting 250,000 jobs every month. it's going to balance out, it's going to average out. but i do think that no president creates jobs or should be creating jobs. what's the thing that the white house should be doing, if anything, to create jobs or is this entirely removed from policy? >> i don't think it's removed from politics at all. the target of 250,000 jobs a month is something that any president would shoot for. that's kind of a return to normal. the question is how do we get there? we're probably going about 1% less than we need to. to get jobs at 250,000. >> 1% of jobs at economic

growth? >> yes. i think that slow growth is coming about for lots of reasons. the contraction is not in the data yet. it was what mr. krueger mentioned. that was a political point. not an economic one. >> when did you think that starts coming into the data? >> if you look for the whole year, my estimate is about a half a percent reduction in growth from the sequester about 1% reduction in growth from the taxes we had. >> before the sequester, $85 billion out of the economy over seven months compared to the $85 billion a month that the federal reserve is putting in every month. you say the fed's action is maintaining the economy's lukewarm progress. ben bernanke said when the job situation improves, the fed may start pulling back. tell me, we have already discussed a lot of how this affects the stock market picture. what happens to the jobs picture? what role is this activity playing in this lukewarm jobs picture that we have? >> so think of the fed as minimizing the really bad risks, the disruptions. so what they are doing is they

are minimizing the chance that we slip into recession again, but they can't get us to escape velocity. as the fed steps back, then the probability of falling back into recession would go up. >> we do have the fed's advantage is we have the low interest rates. we have the housing boom going on. if you want to call it that. we have an energy boom going on. irrespective of politics around that. what is the thing that we need that boosts that growth that kevin is talking about? how do we get that 1% or 1.5% out of the economy? >> there are several ways. kevin has a good point. the president coming out with an actual budget is one step forward. getting some negotiation and compromise on that budget with congress and moving forward so we have a road map of where we're going is one way to eliminate uncertainty, even if it's bad news. if we see potholes in the road, we can brace ourselves for them or avertthem.

the fed has been the only lifeboat in a sea of uncertainty. some of seas are getting a little calmer with the housing market coming back. the fed has played a key role. that is adding jobs, but it's not enough. and i think mohammed makes a good point about the fact that the fed is preventing us from slipping into another recession. we have yet to reach escape velocity. >> you're still optimistic. mohammed, are you? >> a little less and i'll explain why. the dynamics of the economy is every month we don't see rapid growth, it makes it harder. why? a couple of reasons. one, the international environment is getting trickier. it's getting more challenging. so the head winds we face coming from outside are very large. secondly, fundamentally we are structurally impaired. you use the example of a hospital. we came out of the hospital, but we are structurally impaired so we cannot run. and every month we delay in dealing with our structural

impairments means we cannot run as fast or long. and i worry about that because of youth unemployment, income distribution. so i am more cautious than diane. >> kevin, what is your sense of how we fix this going forward? >> i think we are poised to have a good growth year or two provided that things get fixed just a little bit more. i think that diane mentioned the fact that there are a lot of things like autos beginning to look like normal, like they did before the crisis, so i think we're close. if we get out of the situation where washington is mucking things up with uncertainty and fiscal drag. >> but the market has weaved around washington. the stock market has sort of said, whatever, you guys get it it together or you won't. the problem with jobs and the rest of the economy, half of the country is not participating. >> and that's mohammed's head wind that is most important. the long-term unemployed are difficult to reconnect to the labor force. it's a big job to do so. that's why it's so important that washington get its act together.

stop squabbling. give us a big fundamental tax reform that lowers madgeinal rates and broadens the base. if we do that, we could get the extra percent. >> i'm going to nominate you three to a commission to get that done. it's probably not as complicated as it sounds. it just does need will and agreement. what a pleasure to have you all here. mohammed, the ceo of pimco, diane swann, kevin hassett, at american enterprise institute. president obama has one assignment that stays the same each year. turn in a budget. he missed the deadline in february but next week he will turn in his work. we'll give you a sneak peek at the big cuts and entitlement changes he's planning to propose. more than two years ago,

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four years ago congress passed a budget, a real one. lawmakers haven't passed one since. president obama will release his budget proposal next week that aims to reach a deal with republicans.

senior administration officials say it includes changes to social security and medicare plus new tax increases. the new budget will include an offer the president made to house speaker john boehner in december. officials say that's proposal included $400 billion in savings to medicare over ten years. for social security president obama plans to propose a switch to so-called chained cpi. proponents say it's a more accurate way to measure inflation than it's done now which they claim overstates growth and consumer prices. kritdices say it's not a better way to measure for social security recipients because they spend so much on health care which rises faster. the new budget would lead to $1.8 trillion in savings over ten years. it will replace the forced budget cuts that took effect on march 1st. also known as the sequester. joining us is austin goan gools

and a good friend to the show. thank you for joining us. >> thanks for having me back. >> the budgetary process has been stupid in washington for the last few years. what's supposed to happen is when you were at the white house, you put out a proposal in february. people negotiate. they have meetings and talk about it. they come up with a proposal and then congress votes on it and the senate votes on it. we have had this dumb system where one side or the other puts forward a proposal that hasn't been negotiated, not been compromised and it fails or passes and that's the end of it. how is this going to be different? how will this budget be different than all other budgets? >> you know, i don't know that it will be different. i think we have had a budget. people are saying we haven't had a budget. there has been a budget, it's just that the budget hasn't been a stand-alone budget. they have just been saying, okay, our budget will be extending the budget that's there now. >> that's the continuing

resolutions we talk about. >> so in this case, the president is putting forward a budget. he put forward a budget in the past. this one what's notable is exactly what you noted, which is he's going an extra mile saying, all right, there was some question of whether they rejected his offer in the fall, was he still willing to make a compromise. it sounds like in this budget he is going to be willing to compromise, but i don't know. i don't see the republicans really coming around. it feels like right now at least the dynamic is still the same. the president is offering some cuts and some revenues. including cuts on entitlements and the republicans are -- they are not using that as a starting point. they're just opposing this. >> you're a professor and were a professor before. let's be prof sorial about this for a second. the budget is the most important thing the government can do because it's a manifestation of the government's prioers. so what we haven't had is a new budget that outlines a government's priorities which change on a year to year basis.

we have the continuing resolutions that fund agencies at the same level they were funded before. some should get more, some should get less money. isn't it the thing they should do in washington against all other things? >> yes, yes, but they aren't. we are where we are. what are we going to do? i think the budget is a representation of the most important decisions the government has to make. and in this case, we have gotten into a dynamic in which the president proposes some things and they'll propose them and then the democrats in congress will oppose what the republicans do. if we can't take a step back and each side be willing to give up some things, i don't know how we ge get out of that. >> when we talk about the economy we're in now, jobs are growing a little more slowly than we would hope, but there's clearly potential. the stock market shows that people think things are going to

be okay. we need -- the way you squeeze more out of an economy like this is greater efficiency, perhaps tax reform. can we get to that point in life when we can't do the basics like a budget? can america be great if we can't do budgets? >> i certainly hope so. i hope that -- you sense most of what happens in the economy, 90-plus percent has nothing to do with the government. i would hope dysfunction in washington would not bog it it down. but as you have been saying for months, if not years, we have got to create more jobs. we have to get the economy growing faster than it is. we have had modest growth at best. the rest of the world is even worse than that. and if you add on the sequester, if you add on these drags coming out of washington, it just makes the job more difficult. >> always a pleasure to see you. thank you for being with us today. austin joining us from the university of chicago. the upcoming budget battle isn't going to be fun, but my

battles with richard quest always are. when it it comes to the economy, what keeps us up at night and what the are the two of us most excited about? a cross continental debate on those questions next on "your money." [ male announcer] surprise -- you're having triplets. [ babies crying ] surprise -- your house was built on an ancient burial ground. [ ghosts moaning ] surprise -- your car needs a new transmission. [ coyote howls ] how about no more surprises? now you can get all the online trading tools you need without any surprise fees.

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time for a little q&a with my friend richard quest. host of quest means business on cnn international. i have been insisting that the u.s. is a runner on the road to economic recovery. after growing at a rate of .4% in 2012, the u.s. economy has been picking up speed. economists are raising their forecasts for first quarter economic performance. many now think that gdp grew 3%. or more. some even say 4% growth is a possibility. i don't think either of us believe that. the stock market has been on fire. housing is rebounding in the united states. there's real money to be made. real wealth to be built. but there are challenges, richard. a paltry 88,000 jobs were added. we just found that out in march,

this friday. it's not nearly enough. europe, where you are, deep recession. asia has been slowing down. political dysfunction in washington remains a dark cloud over long-term growth. richard -- yes, richard? >> are you going to get on with this or what? >> i'm about to. it seems that the u.s. is in a fork in the road to recovery, it could take off or stumble badly, so here, richard, as you have waited so patiently for, is the question. what are you most optimistic about and what are you most concerned about? let me see, who should go first? i'm going to go first, how is that? >> richard, i am most optimistic about the energy boom underway. in the united states. we are extracting record amounts of oil and gas from shale rock through fracking and other technologies and that is pushing the price up for natural gas lower which is used to generate electricity. that helps utilities and heavy industrial companies compete. that creates more jobs for americans.

possibly a resurgence in manufacturing jobs. next year u.s. oil imports are forecast to fall to their lowest level in 25 years. america is on the path to continental energy independence. got to include canada in that, and the economic rewards will be enormous. ironically the energy revolution is happening with little help from washington. that's my biggest concern. broken government, because of partisan gridlock. we haven't had a real budget in four years. no long-term effort to deal with the country's debt. no effort to deal with infrastructure, our elected l e leaders prefer to govern from one crisis to another. that's my biggest concern. richard, your turn. >> my good friend, ali velshi, is most definitely a glass half full man. he starts with the optimism. i'm going to start with the pessimism. i'm most worried about the inactivity and the dithering, the gridlock, the slow decision making that takes place on both

sides of the atlantic that led to a debt ceiling debacle, a sequestration, and in europe, a continuing miserable state of affairs, best seen most recently by cyprus. despite all of the natural, innate, good, thrusting forward of the market, i regret to say i still remain a glass half empty person. and even more so today because the biggest threat, the biggest worry that i can see at the moment is that i won't have ali velshi to put right each week to open his eyes to the sensible views as he goes into whatever myop myopics that he wants. >> i will miss you a great deal, my friend, but we'll work together again. otherwise, i'll just call you and speak to you for a minute

each week. richard quest, my good friend, go well, my friend. the s&p 500 is returning double digits already just four months into the year. should you lock in your gains? or ride it out? i'll talk with the of the best minds in investing about what you need to do with your money after the break. [ female announcer ] girls don't talk about pads... but they do talk about always infinity. [ marcy ] it's like memory foam. [ female announcer ] the only pad made from a revolutionary material. [ erina ] it totally fits to your body. [ female announcer ] it's incredible protection, you'll barely feel it. always infinity. tell us what you think.

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s&p 500 has been hitting record highs. so far this year, it's about 10% higher than it start said. analysts say the index could move 1% higher before we see a pullback. where should you have your money? the most basic rule of investing. risk and reward go together. what you have to decide is how much risk you can stomach. or how much reward you would

like. three of the best minds in investing join me now. a portd portfolio manager, jim, and doug. these guys have been advising you on my shows for more than a decade. i'm going to ask you all the same question. if you believe that there's another percent in this market, that's not enough for most people. they can't in april throw in the towel and say we're done. how do you squeeze more out of an investment without taking undue risks? >> when you're looking at the market, you're talking about an index. so we want to look at it as sector and stock specific. the time to rotate out of sectors that have done really well, ie, some of the media companies, the utilities, consumer staples, go into areas that are still undervalued, maybe the autos, industrials, some of the teches. that's where you make the money, finding the difference in the market that is undervalues and overvalued.

>> now you can't just throw your money at the market. you say, maybe the market pulls back. i have places still under value. >> parts of the market that still, we think, have a good way to run. especially over the next three to five years. >> jim? >> the way i would answer the question if you believe the market is only going to go up 1% and you want to get a return greater than that is to buy dividend-paying stock. it has to be one with good fundamentals, well-covered dividend and a dividend that could grow. it leaves you to large cap multinational companies with good balance sheets. many of them are 3% or 4%. >> that's better than an kaekt or bond fund, but some worry those might be at the top of their evoluations, too. >> if you're not and you want to get in, you might buy half the position right now because the market has had an extraordinary several months. and then when the inevitable pullbacks come, buy the rest of it. that way you're not totally risk right now. >> fixed income things have had

a bad name recently. they're getting a bad name because when markets are running 10% in three months, people say why are you in the markets? why aren't you somewhere else? yield is not there. you don't think people should go too nuts. you should stay in it. >> most people don't want to have 100% of their money in the equity markets no matter how diversified they are. most people have a combination of fixed income mixed in with the risk tolerance. we're talking about treasuries and the risks in treasuries. there's a lot of opportunity in other places. whether it it be flexible income funds. emerging market debt. there's a lot of things you can get into that will enhance and diversify and build you additional yields and allow you to rebound and take advantage of that. >> you're a financial planner. people must come to you when markets are going good. do you put anybody into individual stocks? >> sure, there's a time for individual stocks. there are places you can bring some value in that versus outright indexes.

what we really look at is a year ago, you have to look at growth versus value. it's an easy way to eke out extra return versus looking at the market overall and the s & p. so a year ago when you had growth outperforming value, you could rebalance accordingly. now a year later, the exact flip-flop has happened. you can rebound between those and you're going to create additional return. >> we have given you broad strategies. they're all three different. after the break, we're now going to tell you exactly what to do to keep your port foal you growing. not just stick around, but come back with a pencil and paper.

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so one point my three guests have made is that don't get nuts about looking at the market. by the way, surratt, doug, and jim. don't get crazy about the market indices because much our your investment should be in something that looks like the s&p 500, the bottom line is this

is a world made out of mutual funds, sectors, industries, and geographies. i want to go through exactly what they would recommend someone do right now in this market where we have a little pullbacks, but largely this market has been going in one direction since the beginning of much. in one direction since the beginning of the year and in fact the really brond it's been going in one direction for a lock time. so we are not -- the low hanging fruit for investors may be gone. what do you do now. >> you go with established companies that have global footprint that participate in the emerging markets, have a good exposure to the recovering u.s. market, that have good balance sheets and good dividends. i would use companies like microsoft, ge and intel all have between 3.5% and 4% dividends and stable business models and fortress balance sheets. >> they are safe, they're not exposed too much interest rate risk. they sell -- they've got steady

businesses that don't fluctuate too much based on changes in the economy. >> if you can grow revenues 2% or 3%, earnings 5%, 3% or 4% dividend, that's a good total return for somebody looking to put their retirement money to work today. >> you are emphasizing that yield, the dividend, the money it throws off. plus the stock may appreciate in value. if somebody still wants yield, the idea you want to be somewhat conservative but can't put your money in a bank, where do you begin? >> we're back to fixed income again as the offset to the equity side. you need to diversify that. 0% of the portfolio. we keep talking about emerging market debt. i like it because if you take emerging markets versus developed markets, you've got -- their get to gdp is one-third -- >> believe it or not, that's backwards what have it used to be in the old days. >> the yield is about twice the yield of a 10-year treasury. they're going to have the same risk level as an equity but the

opportunity is there for enhancing yield without chasing high-yield, corporate debt too much and getting into very ultra risky assets. >> do you have ideas? >> there is an etf you can certainly look at. the biggest one out there is hedge backed to the u.s. dollar so you don't have the currency risk. you can get on the etf database and search for emerging market debt funds. that one right there is the largest etf out there in the space but there are some that are not hedged so you have kurnly thkurn currency that you bring in. institutions, pension funds have been using this as a small part of their portfolio for a long time. most people haven't. >> these etfs trade just like a stock. this has been a tool that the pros have been using for a long time but they are actually open to regular folks. your stock, guy? what do you think people should do? >> i think you look for secular growth. i think you look for companies -- totally agree with

jim, you want strong balance sheets, growth also, companies that have free cash flow. a company look google, more secular growth, more people searching, more people going on mobile. their share just keeps growing. the stock sells at 14 times earnings earning 10%. look at qualcomm, wireless technology, 3g, 4g, everybody's got a smartphone. >> there is a smartphone going on and qualcomm wins either way. >> there agnostic. look what's happening globally. auto sales are going up. what companies are producing the best products? ford has a 3% dividend. didn't have one a couple years ago. increased it. their products are sell. every quarter they're doing better and better. >> strong management, strong product line. >> secular growth, get rewarded on the income side, on the

balance sheet side you have protection. >> when you say secular growth, what you're saying is they're not dependent on larger economic growth necessarily. they can grow in their area and their area is growing. >> they are dependent on what they produce and how competitive they are within the same industry or within the whole competitive landscape of different stocks you can invest in. >> listening to this you can get better than your 1% out of the market. guys, great to see you. it's been a long time for the three of you and it is good to see you again. some of the best advice you're going to get financially. coming up next, i'll be right back with more of your money. she's always been able to brighten your day.

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as some of you may know by now, this is my last weekend here on "your money" and on cnn. it's been a great 12 years. >> i'm ali velshi. this is "your money." as long as folks running for office won't tell you the truth about the economy, i will. >> i have the bigger speaking part there. >> oh, you certainly did have the bigger speaking part. yes, you did. ♪ the love boat >> take a look. people think i'm crazy. >> how did he do that? >> this is the rock star of wall street. >> i think he could be an economic contender but i'd have to use him more in my next bald-headed movie. >> people want to come up and touch my head frequently. >> just glide it down your head.

there you go. >> i'm tied around this pole and i've got a rope. >> this storm has still got some teeth. >> this is ocean water. there are waves in the streets of downtown atlantic city. >> this ought to come to you. "my big fat greek wedding" butt butt squeeze squeeze. >> i'm bullish on america. i won't steer you wrong and that's no bull. i am just more than old hat. >> this is going to be the seventh fed rate cut? a row! you've got to pay attention to this. this is major. >> who is that hairless prophet of doom? and how can we appease his anger? please! if we give you our hair will you give us back our money? >> for the first time i can't tell you i'll be back next week. can you still follow me on twit