Here's Why Bad News Is the Best News for Investors
BOSTON (TheStreet) -- With no solution in sight for Europe and economic growth slowing in emerging markets and here at home, investors will have to find a new way to generate gains.
Thankfully, dozens of fund managers and strategists meeting together last week in San Francisco at Schwab's annual investor conference offered an in-depth view of their plans and advice to clients.
The investment managers don't see eye to eye. After one portfolio manager said he expects a soft landing for China's booming economy, the next strategist asserted China will slow drastically. As one person talks up corporate debt of emerging-market companies, someone else touts the attractiveness of U.S. blue-chip stocks.
Even though investors at home are uncertain about the future, investment professionals understand that the capital markets offer some long-term attractive opportunities now. Investors who have been fleeing from equities, bonds and commodities need only to recognize those values.Mark Travis, president of Intrepid Capital Funds, said clients showed trepidation at his annual shareholder dinner. "The best values occur in the capital markets when people are the most afraid," he said. George Evans, director of equities with Oppenheimer Funds, said when investor confidence is shaken, "people that are given to react to short-term fears are putting on selling pressure." "The most important thing people have got to understand is that, over a reasonable holding period, there are going to be many different macro situations," Evans says, referring to shifts in global economies. "Prices are usually good when fears are at their highest." The professionals all agree on one thing: Investors with a long-term horizon should be in the market now. Evans says equity investing should be "measured in years, not months or quarters." Some investors welcome big swings in the market. "I get very excited when there's turmoil and volatility in the world. That's how we make money," says Stephen Jones, chairman of Jones Villalta Asset Management. His firm's mutual fund, the Jones Villalta Opportunity Fund, carries the tagline: "The long term is the only term."
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