Comments from a Chief Equity Strategist

At the recent Broker-Dealer Conference in Washington DC, I had the opportunity to meet Bob Doll. For those who do not know him as a talking head on television, Bob Doll is Vice President and Chief Equity Strategist for BlackRock. BlackRock is one of the world’s preeminent asset management firms and a premier provider of global investment management, risk management and advisory services to institutional, intermediary and individual investors around the world. His comments:

He is cautiously optimistic right now despite the fast sentiment shifts being seen in the markets.

Double Dip Recession. Unlikely. Since last June we have had five consecutive quarters of positive GDP growth. But we remain in a “muddle through” environment.

Earnings. 40% of S&P 500 revenue is derived from overseas. That figure is expected to rise to 70%. Multinational Large Caps are performing well. Corporate balance sheets have never been better so expect more merger & acquisition activity.

Growth. BlackRock is overweight in U.S. equities right now as they are underperforming multinational and foreign equities and as such have higher potential for future growth. He sees challenges for Japan and Europe and the Emerging Markets.

Fixed Income. Equities are paying more than bonds right now.

Long Term Growth. Conservatively 8%. Expect 4-6% earnings growth in the U.S. and 6-8% in foreign markets.

Portfolio. During this slow recovery, overweight on Dividend paying equities. In sectors he likes (in order) Industrials, Technology, Energy, Consumer Products, Healthcare, Utilities, and Telecom.