Dublin Roundtable: Navigating noise and lower-for-longer growth
18 Feb 16
The precipitous falls seen on stock markets in recent weeks have opened up opportunities for brave managers of long term money, while at the same time ratcheting up the noise and negative sentiment in the round.
Patrizia Libotte, head of multi-asset investment at Covestone Asset Management, explained, while the firm has been extremely cautious in adding to its equity exposure in the past few years because valuations looked stretched, especially in the US, the recent downward moves have seen some very interesting opportunities emerge to add selectively to equities.
But, she added, longer term one has to start from the assumption that rates are going to be lower for longer and, so too, will returns.
“I think you need to shift the focus a bit to longer-term objectives. You need to shift the focus away from core markets which are the most expensive markets.”
Libotte said the firm has also recently been adding to its position in emerging markets.
“Valuations are extremely cheap. At current levels we can expect returns in 8%, 9% over the next five to seven years in emerging markets. It obviously takes a strong stomach but I think over the long term, I think it’s where the opportunity lies/
She was also fairly positive n the outlook for 2016, saying it was a year where investors should sit tight, “but if you can take advantage of some contrarian ideas it could turn out to be a very good year.”
Tags: Investment Strategy
