Seeking Alpha

BlackRock: Stay nimble

  • "2014 is the year to squeeze more juice out of risk assets. But investors should be ready to discard the fruit when it starts running dry," says BlackRock's Ewen Cameron Watt in the firm's 2014 Investment Outlook. "Beware of traffic jams: easy to get into, hard to get out of."
  • Behind the view is the idea central banks (U.S., U.K, Canada, China, to name a few) are poised to begin tightening monetary policy.
  • BlackRock doesn't believe stocks are yet in a bubble, but its "risk indicator" - measuring enterprise value against earnings adjusted for volatility - is nearly as high as just before the dotcom bust. "The ratio of the two is the key. High valuations combined with low volatility can make for a lethal mix. This market gauge sounded the alarm well before the Great Financial Crisis."
  • Broad large-cap ETFs: PRF, VUG, VTV, SDOG, VV, SCHX, MGK, DEF, SCHG, SCHV, PWV, FLAG, MGV, DOD, JKD, FEX, EQL, IWY, EZY, JKE, PWB, IWX, FTC, JKF, EEH, SPXH, TRSK, SFK, FWDD, PXLC, ALTL, PXLV, GVT, RWG, FNDX, PXLG, IELG
Comments (2)
  • So, I should stay in all my 'risk assets' for now, and BlackRock will send me a memo when it's time to sell? Hopefully this will be before everyone else gets the memo, so I don't get stuck in one of those darned 'traffic jams'...
    11 Dec 2013, 03:42 PM Reply Like
  • How can the ratio be nearly as high as it was pre-Dotcom bust and yet we are not in a bubble?
    11 Dec 2013, 07:20 PM Reply Like
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