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  • (Are stocks still a good bet in 2018?)

  • In 2018, we are still bullish on equities.

  • I think you are going to get the best returns out of stocks relative to other asset classes.

  • My top two favorite sectors going to 2018 are technology and financial services,

  • particularly large cap banks in the US.

  • (Why are banks a good investment?)

  • Banks, I think, are really intresting

  • because there are a lot of, I think, tailwinds and drivers in 2018.

  • The first I would say is we've had less regulatory pressure there,

  • so banks can go back to regular business.

  • The second is we don't think the market is pricing in the full scope of FED policy rate increases,

  • and that's gonna be supportive of margins for the banks.

  • The third is that, you know, global and US growth is quite strong,

  • so we're gonna see continued demand for and use of financial services.

  • And the fourth is, I think,

  • we're gonna have a huge amount of capital return coming from the banks to investors.

  • We know that many banks have been clear to increase their dividends,

  • and they know equity income, we think, is an increasingly important part of overall portfolio allocation.

  • So, I would say we have a good regulatory environment, we have a good macro,

  • and monetary policy environment, good demand and a very good story for dividends.

  • (How long will this bull market last?)

  • It's really hard to predict how much longer this cycle or this bull market in equities can go on.

  • But, what I do know is we don't have a huge amount of excess in the market.

  • And by that I mean companies have not been overinvesting.

  • They've been very thoughtful about how they've deployed capital.

  • They've been cautious about how quickly they hire.

  • Capital expenditure has been lower than other cycles.

  • And normally when you get too much investment, it leads to kind of overheating.

  • We also don't have to deal with a significant amount of inflationary pressure.

  • Our expectation is that inflation is gonna pick up a little bit from kind of lower levels right now,

  • but that we are not get so much inflationary pressure

  • that really causes the Fed to raise interest rates so fast and really kills the expansion.

  • The last thing I would say is

  • we are at or close to full employment in the US,

  • and we see wage's rising and more discretionary spent. It's a possibility.

  • And that consumers actually will continue to be an active part of the economy.

(Are stocks still a good bet in 2018?)

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B1 US market capital regulatory pressure huge amount bull

Are Stocks Still A Good Bet In 2018? I Fortune

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    林恩立 posted on 2018/01/04
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