A friend of mine at a major investment bank sent me their market outlook for 2013. In 2012, the world markets were up 16%. For 2013, they are projecting:
- Interest rates are likely to remain low for a few years,
- investors should lower their return expectations, and
- “policy” will remain incremental in key developed and emerging markets economies.
Fom an asset class return perspective, there were six key projections:
- Bonds will have virtually no nominal returns for the foreseeable future.
- High yield and emerging market local debt will provide attractive absolute and volatility-adjusted returns.
- Hedge funds will have mid single-digit returns.
- US equities have both near-term and long-term attractive returns, especially relative to bonds.
- Euro Stoxx 50 and US banks have the most attractive near-term and long-term returns.
- Emerging market equities will provide reasonable but not exceptional returns given the various risks.
DISCLAIMER: We at The Venture Alley do not express any opinion on the above perspectives and may not share these views.