A charge into bull market unlikely
The world economy is unlikely to rebound to a bull market, with the share market likely to grind upwards while investors become worn out by its slow progress, according to the global equities portfolio manager at T. Rowe Price, Rob Gensler.
Speaking at a T. Rowe Price institutional briefing, Gensler said the slow return to higher values over the next three years would leave investors “feeling horrible and worn out”.
“The bear case can still happen, there is a 10 per cent to 15 per cent [chance of that], but there is even less chance of a bull market [emerging],” he said.
Gensler said the slow progress would be due to regulatory reform, the lack of robust demand from the Western economies, and the weight of capital coming out of less risky assets over a period of time.
Inflation in the developed world also would pose a risk to that recovery, he said.
However, Gensler warned that the emerging world still had a big problem controlling inflation, with most countries lacking the discipline to set inflation targets.
The “nominal growth” for the developed economies would be approximately 3 per cent to 5 per cent, but the real returns for investors would come from valuations going from reasonable to expensive, Gensler said.
AUTHOR
Benjamin Levy
Recommended for you
As Stephen Jones cites the new class of qualified advisers as a way to reduce legislative complexity in advice, the FAAA’s Sarah Abood says its members still have qualms with the idea and its naming.
CFS has shared key strategies for advisers to use for their varying different demographics with a focus on building relationships rather than transactions.
Financial planning software provider Bravura is focused on a “back to business” strategy to enhance revenue growth which will include the potential opportunity available in digital advice.
AFCA has revealed to Money Management the number of Dixon Advisory complaints it has closed so far out of the more than 2,700 total complaints received.
