Is it time to get out of US stocks? This is what Mark Mobius the chairman of Templeton Asset Management. He thinks that the US economic recovery is still at a nascent stage putting US stocks at risk.
Investors should rotate out of the U.S. markets into better-performing emerging markets, says veteran investor Mark Mobius, warning that corporate earnings in world’s number one economy are poised to disappoint.
“[U.S.] earnings will not be as good as people expect simply because they have a lot of headwinds,” Mobius, executive chairman of Templeton Emerging Markets Group, said in an interview with CNBC on Tuesday.
This is what Mark Mobius thinks. But does the market really care what you think? What do you do when your economic assessments are telling you to do one thing, but the market is doing another? Is it best to follow your assessments of what the market should be doing, or is it best to respect what the market is doing?
Over the past few weeks, some investors have become troubled. The market has been stuck. It has not had follow through either way, but it has also been quite volatile, and at times, the knee-jerk reactions in the market have been scary. These have brought to the surface bearish opinions about the economy, earnings growth, valuation levels, liquidity, and about the ability of the market to maintain these levels and move higher.
There are many experts who believe that US stocks are still a value play. Investors thinking of fleeing American stocks should stay put, market watchers said Tuesday.
“In our opinion, the bull market continues in the U.S. and it’s a good place to put your money,” said Julian Emanuel, a U.S. equities and derivatives strategist at UBS, which holds about $150 billion under management in the Americas.