A Clear Bias in Favor of Risk Assets 

 

Viewpoint 

2/6/2014 

Amid concerns about overheated markets, Stefan Hofrichter and Kristina Hooper cite an ongoing global economic recovery, accommodative central banks and continued improvement in the US economy as among the key reasons to prefer equities.


Key Takeaways

While risks exist, continuing financial repression and a global economic recovery lead us to favor risk assets over benchmark bonds.
Upbeat leading economic and sentiment indicators point to an ongoing improvement in the global macro environment over the coming months.
But with an expected continuation in deleveraging, new trend growth will likely be lower than before the 2008 economic crisis.
The US unemployment rate has fallen substantially and the labor market is significantly improving, though flaws exist.
Annual US budget deficit projections should continue decreasing in the shorter term.


Part 1
Sefan Hofrichter Stefan Hofrichter, CFA
Chief Economist
Stefan Hofrichter discusses our 2014 global investment outlook, including why continuing accommodative policy from central banks should favor risk assets even amid concerns about overheated markets.

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Part 2
Kristina Hooper Kristina Hooper
US Investment Strategist
Kristina Hooper discusses issues for the US in 2014, including the labor market and budget deficit.

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The material contains the current opinions of the author, which are subject to change without notice. Statements concerning financial market trends are based on current market conditions, which will fluctuate. References to specific securities and issuers are for illustrative purposes only and are not intended to be, and should not be interpreted as, recommendations to purchase or sell such securities. Forecasts and estimates have certain inherent limitations, and are not intended to be relied upon as advice or interpreted as a recommendation.

 

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AGI-2014-01-31-8888 

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