Tags: loews | rosenberg | stock | invest

Rosenberg: Stocks Now ‘Historic’ Buy Opportunity

Sunday, 04 Dec 2011 01:23 PM

Stocks are a “historic” bargain, while Treasuries are in a bubble not seen since before the Civil War, says Loews Corp. investment chief Joe Rosenberg in an interview.

The current fear over the future of equities is overblown, much in the same way as investors have gotten panicked out of perfectly good markets in the past, Rosenberg says. “We’re at an inflection point in history, and that is what I want to emphasize. I’m not speaking about a trade. I do not know what is going to happen next week or next month,” Rosenberg told Barron’s.

“In terms of economic history, the equity market looks a lot like the Treasury-bond market in the early 1980s, when I had the most difficult time convincing people that they ought to purchase bonds at 15 percent yields,” he says. “Equities can easily generate a 10 percent annualized total return over the next five to 10 years. And they would still not be overvalued at that point. That’s the beauty of it.”
________________________________________________________

Editor's Note: Exposed: You Owe It to Yourself to Learn What Obama and Bernanke Are Hiding From Americans
This gripping Newsmax investigative report reveals the truth about America's economic future and the disastrous path that Obama’s and Bernanke’s reckless policies are taking us down. Watch, learn, and receive a free Survival Guide ($49 value) for your personal financial future. Click Here Now.

________________________________________________________

Rosenberg particularly likes U.S. blue chips with exposure to Asian growth and Big Pharma. He’s less disposed to take a risk on small-cap stocks, which he feels are no longer attractively priced. Investors skittish about the stock market’s ups and down of the past several years can conserve cash to buy at low points, but they absolutely should buy, Rosenberg says.

Now is the time, he says. Once the market figures out that the panic is overblown, prices will rise. “One of my key points is that some of the largest potential investors are all underinvested in equities, and they will get reinvested in equities because these are long cycles,” Rosenberg says.

A recent Vanguard Group study showed that average annualized returns from 1926 to 2009 in a 50-50 stock and bond portfolio equaled a little more than 5 percent adjusted for inflation. However, that calculation includes the bond bull market of the past three decades — a large portion of the total period studied.

Meanwhile, Bill Gross of bond giant Pimco predicts that the Federal Reserve is likely to keep years of virtually zero interest rates. The Fed has sat on a target rate of zero to 0.25 percent since late 2008. Gross now predicts up to four more years to come.

Gross fully expects a third round of so-called “quantitative easing” or QE, the extraordinary measures taken by the U.S. central bank to make money available, regardless of lending demand.

“The Fed is focusing on the problems in euro land and the potential lock-up of the financial markets,” Gross told Bloomberg News in a radio interview. “The QE3 that I expect is really not an increased amount of purchasing in terms of the Fed’s balance sheet but an extended period language that allows the market to anticipate a two, three or four years period of time where fed funds stay at 25 basis points.”

© 2017 Newsmax Finance. All rights reserved.

 
1Like our page
2Share
StreetTalk
Stocks are a historic bargain, while Treasuries are in a bubble not seen since before the Civil War, says Loews Corp. investment chief Joe Rosenberg in an interview. The current fear over the future of equities is overblown, much in the same way as investors have gotten...
loews,rosenberg,stock,invest
547
2011-23-04
Sunday, 04 Dec 2011 01:23 PM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved