Equity markets have proven their mettle in the great global reset since the financial crisis, and they have more room to run in 2014, says Leo Grohowski, Chief Investment Officer of BNY Mellon Wealth Management.
"Markets worldwide, particularly in the U.S., are demonstrating strong fundamentals that suggest more growth ahead."
Many investors may believe they have missed the opportunity in equities, particularly in the U.S., where stocks have risen over 180 percent1 since the 2009 low. But Leo believes that strong corporate fundamentals, a faster pace of economic growth, reasonable valuations and ample cash on the sidelines will continue to support earnings growth.
Just as important, Leo says the economic backdrop has strengthened, with fewer "black swans" on the horizon. Investors in this environment will need to remain focused on risk mitigation, including diversification across asset classes and geographies. We think an active management discipline that utilizes a bottom-up approach to stock selection will also be critical to succeed in today's landscape.
"Investors should always stay focused on their long-term asset allocation," Leo says. "At the same time, we think they will be rewarded over time by tapping into these compelling investment opportunities across the global equity landscape."
1 As of 10/31/13, cumulative return since March 2009 S&P 500 index, market bottom, Morningstar
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