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CFA Survey: Look To China & US For Investment Gains
Aspire, Investments | 27 January 2015
By: Lim Si Jie
Articles (169) Profile

The World Bank is expecting optimistic growth in the global economy with its most recent forecast of 3.4 percent global GDP growth. However, a survey of CFA members has forecasted that the global economy to grow by only 2.0 percent on average.

The survey concluded that “continued economic difficulties in Europe, slow growth in emerging markets and a slowing China” continue to weigh down on the global outlook as CFA members took them into account in their forecasts.

The handling of the economic situation in Europe and China will continue to be the “key to growth” in 2015 where “71 percent of members indicate that the progress of recovery of Europe will have a positive impact on their local market”.

Source: CFA Global Market Sentiment Survey 2015

Optimism for Global Growth Weighed Down By Concerns
CFA members signalled that continued accommodative central bank policies and an increased focus on the creation of jobs will “have the biggest potential positive impact” on global capital markets.

On a national level scale, job creation, continued increase in global capital flow and a decrease in systematic risks of banks will “have the biggest positive impact on growth”. Despite positive sentiments that the world economy is expected to grow, “optimism is tempered by concerns” on weaker developed market economies.
The anticipated rise in interest rates and geopolitical instability were also top concerns amongst members who were surveyed.

US and China: Markets to Ride through Volatile Conditions

Source: CFA Global Market Sentiment Survey 2015

The United States and China remain “the top picks” for equity market performance in 2015 amongst CFA members. This is similar to the case in the 2014 when most CFA members viewed the US as a “safe haven” in a volatile and irrational financial market.

Forecasts for a number of the most followed markets seems to suggest that 2015 “might be a year of very nominal gains”. Investors should look towards more secured assets such as blue chips or dividend plays to see impactful positive returns.

Si Jie is no stranger to investing having started his journey at a young age. He is heavily influenced by acclaimed investors such as Benjamin Graham, Peter Lynch, and John Rothchild.

Please click here for more information about this author.

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