With equities markets near record highs, what should Raymond James advisors be telling clients now?

Increase their stock holdings, says Raymond James Financial's chief investment strategist.

“I think it’s a mistake not to be invested now,” Jeffrey Saut told a standing-room-only audience at the firm’s annual national conference in Dallas on Wednesday. “I’ve been saying for the past six months that there is decent probability that we are in a secular bull market that has a decade or so to run.”

Saut, who is also director of equity research for Raymond James, urged advisors to begin putting their clients in the market immediately. “Stocks still look pretty cheap to me,” he said.

He said equity buyers appear to be in a stage of guarded optimism -- which, he maintained, is typically is followed in bull markets  by enthusiasm, exuberance and surrealism before, at the end of the run, hitting disillusionment.


Among the factors underpinning Saut's optimism: a move toward U.S. energy independence, which he predicted would occur by 2020; increased onshore manufacturing; a real estate revival led by higher housing prices; strong auto sales; and what he called a new breed of U.S. lawmakers who will back “smarter policies.”

“It’s difficult to see what will pull the U.S. back in a recession except for an unexpected black swan event,” Saut said.


Concerns about the debt and deficits were overstated, he maintained, saying that the U.S. will grow its way out of debt, while structural deficits “won’t last forever and will get either repaid or liquidated over time.”

The U.S. is now “a mature economy,” Saut said, predicting it would grow about 2.65% this year if productivity continues to improve. But more importantly, he emphasized, investors should be focused on growth in the global economy for future gains.

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