Investors can look forward to continuing gains in the equities markets in 2013, according to panel of experts who spoke at a media briefing on Tuesday.
The event, organized by Prudential Financial and held at the Millennium Hotel in New York City, featured a panel of five Prudential economic and markets analysts. The gathering explored the outlook for global economy and markets, including the retirement planning space, for the year ahead.
Ed Keon, managing director and portfolio manager of Quantitative Management Associates, Newark, N.J. said that investors can expect “good performance” from equities, particularly riskier assets, in part because the economy will grow faster than the consensus estimate. Fueling the economic growth in 2013, both in the U.S. and globally, will be a “healing labor market,” vibrancy of home prices and recovering auto sales.
Equity yields, which averaged 15 percent in 2012 and 10 percent over the last several years, should continue into 2013, sustaining a bull market.
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“The worst of the financial crisis is behind us,” he said. “The markets will improve in 2013. And as this happens, investors will shift from extreme risk aversion to a more normal view of risk.
“Riskier assets are now priced more rationally in past years,” he added. “This more rational pricing is good news.”
John Praveen, managing director and chief investment strategist for Prudential International Investment Advisers LLC, noted an usual dichotomy of 2012: weak economic performance and strong markets, the trend being particularly pronounced in Japan, Europe, India and China. Market gains continued despite subpar economic performance because of measures undertaken by central banks to maintain liquidity and ease borrowing rates. He also cited fiscal stabilization steps in the eurozone and a modest GDP rebound in the U.S. and emerging economies as positive trends.
“The factors that drove markets up will continue to be in play in 2013, boosting global stocks by 10 to 15 percent,” said Praveen. “Central banks will keep interest rates low. And we can expect further fiscal stabilization measures in the eurozone and elsewhere.”