BOSTON - In today’s turbulent world, there will be plenty of investment opportunities, but also plenty of risk.
That’s was the message delivered at a panel entitled “Rewarding Risks: Taking Advantage of the Global Economic Expansion and Recovery,” at the
“Volatility will create cheapness,” said Richard Hoey, chief economist,
Currently, the global economy is at an inflection point, said Michael Atkin, head of sovereign credit research at
“In 2010 there was an environment where investors were paid to take risk,” he said. “Now the world economy is going through a fairly decent recovery and things are changing. These sorts of inflection points in the economy are times when you’d expect some volatility.”
As 2011 progresses, the reward for taking risk will decrease. Investors will no longer be paid handsomely for any risk they take. Atkin said he has dialed down risk a bit in his fixed income funds. “Looking from October through the end of the year and into next year, the run looks to be a pretty good one,” he said. “The world economy looks to be improving. Opportunities seem to be opening with the sovereign debt issue. There are some pretty attractive options in Europe. We’re looking at a fairly benign environment for the global investor after the volatility passes.”
Emerging markets still spell opportunity for investors. That’s because they were willing and able to provide the type of stimulus not seen in the U.S., said George Iwanicki, Jr. of
As far as what Atkin called “the Greek situation,” Germany will be forced to help out Greece to save the Euro, but it will be a much slower process than the markets would like. “The markets want everything resolved now,” Atkin said. The markets have to live with the fact that German politics won’t move quickly on this. Greece is insolvent. No one is sure whether Spain and Portugal are insolvent. Greece will be forced into restructuring. The great opportunity here is in non-Greece peripheral debt.”