I don’t think we’re in a bond bubble, although I know many people feel that way. Our increase in our equity allocation recently simply reflects the momentum in stocks at the moment, although I don’t have long-term faith in them. American businesses continue to cut costs, and profits continue to out-pace revenue growth. Also, strength in the manufacturing sector is helping. Lastly, people are becoming wary of emerging markets, and I expect a hard landing in China, which would be good for the United States. But all that said, I believe a peak in stocks will probably occur later this year, accompanied by a major correction. In order for the rally to occur beyond that, you have to believe people are happy with their savings rate and will begin spending again at levels seen earlier in the decade. We’ve seen the savings rate recently go from below 1% to 5% and I think it will still double from there. That means they’ll have to finance purchases if they want them, but they no longer have access to the type of credit they once had. So near-term we like stocks; longer-term not so much.
Despite brighter equity prospects outside the U.S, your clients may be underinvested in international and emerging markets equities. Help them take full advantage of non-U.S....
Explore ways in which you can manage client expectations - while still delivering the best possible experience - with the help of an advisor team.
Download this complimentary White Paper to learn the 6 key considerations that will transform your business.
Oct 22, 2015
learn how top performers are leveraging smart technology, such as Workflow and digital information capturing tools, to stay competitive and efficient.
Oct 14, 2015
Hear from industry experts regarding what actions advisors should be taking now to prepare their clients for the next 12 months.
Sep 17, 2015
Join this exclusive webcast with Matthews Asia Chief Investment Officer, Robert Horrocks, PhD, who will share his insights.