BlackRock's Kapito recommends real assets over pricey stocks

Investors should buy assets such as real estate and infrastructure funds as U.S. stocks have hit record levels.
DEC 18, 2013
With U.S. stocks at record levels. investors should buy assets such as real estate and infrastructure funds, BlackRock Inc. president Robert Kapito said Tuesday. Investors can't get sufficient diversification from stocks and bonds because the two asset classes are moving increasingly in tandem, Mr. Kapito said in a Bloomberg Television interview. “Stock prices are more about momentum” and have been fueled by more by stock buybacks than by revenue, Mr. Kapito said. “We want people to get into the market but in a much more diversified way.” BlackRock, the world's biggest money manager, today released its 2014 investment outlook, predicting that global stocks will climb in the coming year. There is a 55% chance of “tepid” economic growth in 2014 with developed economies expected to accelerate in tandem for the first time since 2010, according to the BlackRock report. U.S. growth will reach 2.5%, BlackRock estimated. As confidence has grown that the global economy can withstand a cut in stimulus from the U.S. Federal Reserve, the S&P 500 has jumped 27% this year, heading for its biggest annual gain since 1997. 'FROTHY' MARKETS BlackRock's chief investment strategist, Russ Koesterich, said stocks in Europe offer better value for investors than equities in the U.S. Parts of the U.S. market are “frothy,” while companies in Europe are still reasonably priced, he said at an investment conference hosted by BlackRock in New York. BlackRock forecast in its outlook that the Federal Reserve will decrease its stimulus-oriented bond purchases “lightly” while keeping interest rates low. “Tapering aside, 2014 will still be the second-most-accommodative year in U.S. monetary history, after 2013,” BlackRock said in the report. The ability of central banks to stimulate further growth through loose monetary policies has waned, the company said. “Monetary growth does not address skill mismatches, aging populations, labor market red tape and protectionist policies,” BlackRock said. “Central banks can ease some of the pain — but ultimately policymakers must deliver structural reforms to boost growth.” (Bloomberg News)

Latest News

Tax-aware investing should expand client choices, not constrain them 
Tax-aware investing should expand client choices, not constrain them 

The best tax plan asks not only how much a client could save, but what they would have to give up to save it. 

Merrill veteran Jonathan Stogsdill joins Trinity Wealth Advisors in St. Louis
Merrill veteran Jonathan Stogsdill joins Trinity Wealth Advisors in St. Louis

A 20-year financial services veteran brings values-driven planning expertise to the St. Louis-based RIA.

SEC enforcement against public companies hits record low under Atkins
SEC enforcement against public companies hits record low under Atkins

New research shows a 71% plunge in actions in fiscal year 2026, with total settlements the lowest since the database began.

Edward Jones advisor launches SteadRock Private Wealth on LPL platform
Edward Jones advisor launches SteadRock Private Wealth on LPL platform

An Ohio-based advisor departs Edward Jones to build an independent firm focused on retirees and business owners.

SEC and state regulators tighten grip on fraud in fiscal 2026
SEC and state regulators tighten grip on fraud in fiscal 2026

Broker-dealer enforcement actions surged 66% as the SEC and state regulators cracked down on Ponzi schemes and digital asset fraud.

SPONSORED Best Practices for Engaging Women Around Alternatives

Growing wealth, evolving priorities, and untapped opportunities are reshaping how women approach long-term investing.

SPONSORED Built on insurance experience to deliver on long-term promises

Knighthead Life entered the market with a competitive MYGA. A strong launch earned advisor confidence and paved the way for FIAs.