The research forecasts that equities will appreciate by about 5% in 2014, depending on corporate performance.
The U.S. large-cap Russell 1000 Index will reach 1,060 while the S&P 500 Index will hit 1,900 by year-end 2014, according to a new report from Russell Investments. The Russell 1000 (RUI) closed Wednesday at 1,024.99 and the S&P closed at 1,837.49.
The research predicts that global equities will outperform cash and fixed income assets in 2014, but the paper warns of “risky scenarios” that investors need to be on guard against.
“One [scenario] is that global equity markets move into speculative overdrive,” the report states. “Asset markets have a history of overshooting, and global equity markets could become outright expensive if confidence in the economic outlook takes hold.
“The alternative scenario is that economic growth disappoints and investors conclude that monetary policy has reached its limits,” the report adds.