Retail investors are ‘in a turmoil’ amid market volatility, former TD Ameritrade CEO says

Joe Moglia, Former TD Ameritrade Chairman and CEO, and Executive Director Of Football at Coastal Carolina University, sits down with Yahoo Finance Live to discuss the era of NIL deals in college sports, the state of the market bearing geopolitical pressures, types of investors, sector actions,

Video Transcript

[MUSIC PLAYING]

[DIGITAL BEEPS]

- Welcome back to Yahoo Finance Live. Let's get a quick check of where markets settled out today's session, about 37 minutes ago. And as we can see, a lot of green across the screen.

The Dow Jones Industrial Average, up more than 650 , points just at that 2% mark. The S&P 500, also up about 2.6% or 107 points. And the NASDAQ Composite, the big winner during today's session, up about 3.6% So volatility, at least temporarily subsiding across major US equity markets. We'll see where things stand tomorrow.

BRAD SMITH: Well, while operating a trading platform provides a whole new perspective for retail investor protections, directing football operations at the collegiate level, that offers its own perspective for educating the next wave of athletic talent and also how to manage finances in the era of new name, image, and likeness deals. So joining us now for a wide-ranging discussion and perhaps to draw some parallels is Joe Moglia, who is the former TD Ameritrade Chairman and CEO and Coastal Carolina University Executive Director of Football. Plus, joining us for this conversation, we've got Yahoo Finance's Dave Briggs. And so it's good to have you back here with us, Joe. Perhaps, where we dive in, what do you believe is the prevailing thought among retail investors during the markets that we've been tracking over these past few sessions, during volatility of the past few weeks, even despite a major up day that we've seen here?

JOE MOGLIA: [LAUGHS] Brad, I think they're pretty much unsettled. I think we've got a war going on that we haven't had recently. It's really serious. We've got a Russian dictator that is incredibly unpredictable, regardless of what he winds up saying.

And the markets have been in a very, very difficult environment. You've got major sector allocation changing from what's been in place in the past. You've got oil at 10-, 12-year highs.

So I think the typical retail investor that is not disciplined, is not thinking strategically, I think they're in a turmoil. They're concerned. I think they have some sort-- I think they have anxiety.

DAVID BRIGGS: Joe, on your LinkedIn bio you say, "Always looking for the next big win." So retail investors are looking for that next big win. What do you tell them?

JOE MOGLIA: I think, David, it depends on what kind of investor they are. So I think there are really three types. There's a buy-and-hold type. And over any three-to-five year period, the United States markets have always done pretty well, so you're OK. But you're going through a difficult period right now.

Then you've got what I call a long-term investor, but that person winds up doing a little better job of managing the portfolio. So into strength, they'll trim a bit. On weakness, they'll be adding.

Now, that type of investor probably, if they're paying attention to what's going on, [CHUCKLES] which they should be, they would be making some sector allocation changes. The danger with that is that when you're ready to buy something, it's already gone up because you're making a change. When you're ready to sell something, it's already gone down. And you have to have the guts to do what you believe is the right thing at that moment of time and buy or sell, even though it's been up or down.

Then you've got the day trader, of course. The day trader doesn't care what's going on in the world, doesn't care about geopolitical issues, doesn't care what's going on with inflation, doesn't care. The day trader has done very well in our history, the late '90s and currently, because the markets have done well.

The day traders, if he or she is going to continue to do well and the market environment is difficult, they probably better be short. And they should definitely not hold the position overnight. But I think that's what's going on with the three different types of investors. They're all different.

BRAD SMITH: What are the sectors that look most appealing to you right now, Joe?

JOE MOGLIA: Well, I think, right now, just based on what's going on, I think I like industrials first, within industrials, defense, national defense. I think you've got to like energy, but energy is, kind of, still to the moon, as far as size goes. But unless things get solved with Russia and Ukraine quickly, that's going to continue to go up.

Commodities should continue to go up. I like health care. I think there's no reason why health care shouldn't do reasonably well over the span of the next year or so.

And I don't think you could ever get away from technology. I really don't believe that. And when technology is going down, I think that that's a real buying opportunity. But there would be the sectors that I'd be focused on now.

DAVID BRIGGS: So a diverse portfolio. To your diverse background, we mentioned you're the head football coach at Coastal Carolina, the executive director of the football program. You were also the head coach in the United Football League, which--

JOE MOGLIA: Yeah.

DAVID BRIGGS: --quite frankly, I didn't know existed. I ask about that because the USFL and the XFL are trying to go again, make another run at another professional football league. Does either have a legitimate chance at success, financially, or is it just a waste of time?

JOE MOGLIA: [CHUCKLES] They have not, based on history. So the UFL was really a great league. And the last year was the first year I've been-- I was involved with that, as head coach, was 2011. And it was the third year of the league. And the reason we went out of business is because the people that owned it did a horrible job of managing finances. The commissioner would also be guilty of that.

But in that league was Jimmy Fassel, the New York Giants. You had Denny Green, Minnesota Vikings. You had Jerry Glanville, and you also had Marty Schottenheimer, who's the fifth winningest coach in the history of the NFL. You had pretty good-- and then you had me.

You had pretty good people there. Two-thirds of my team had played in the NFL. And I had two Heisman Trophy winners play for me at quarterback. And we didn't make it because it was poorly run.

Now, I do think there's a model that you could put into place, that potentially would work. But so far, that hasn't happened. And now you've got two--

BRAD SMITH: Joe, we got to leave things there.

JOE MOGLIA: --leagues competing against each other. That one, to me, is a little bit-- that's going to make it tough.

BRAD SMITH: If it wasn't already tough before--

[LAUGHTER]

--that certainly does add another layer and element to it. Joe, we gotta leave things there on the day. But we always appreciate the time, having you on. Gotta have you back to continue this conversation. It's Joe Moglia, who is the former TD chairman and CEO and executive director of football over at Coastal Carolina University. You also heard from Yahoo Finance's own Dave Briggs during that conversation.