The world’s biggest asset manager’s 10 Predictions for 2010 and the next Decade

Posted by Economic Forecasts and Opinions

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BlackRock, Inc. (BLK) Vice Chairman Bob Doll has been putting out annual predictions for 15 years.  Doll, who helps oversee about $3.2 trillion at BlackRock, the world’s biggest asset manager, just released his ten predictions for 2010 and for the next ten years.  Eleven of the twelve predictions he made for 2009 were right.  Below are Highlights of his latest market forecasts.

Doll’s Predictions for 2010

  1. U.S. economy grows above 3% outpacing the developed world
  2. Unemployment to remain high, but with positive job growth
  3. Earnings rise significantly – 20-30% on cost & productivity advantage particularly from a weak dollar.
  4. Inflation a non-issue for the developed countries, but oil and gold will still go up
  5. Interest rate rises on treasury curve – 10-year treasury targets 4.5%
  6. Stock outperform cash and treasury – S&P 500, should rally another 12%
  7. Emerging markets outperform
  8. Health care, IT & Telecom outperform
  9. More M&As
  10. Dems stay in control of the Congress

Doll’s predictions for the next 10 years:

  1. US equities experience high single digit percentage total returns, in the range of 6% to 8% annually, after the worst decade since the 1930s.
  2. Recessions occur more frequently during this decade, rather than only once a decade as occurred in the last 20 years.
  3. Healthcare, information technology, and energy alternatives are leading growth areas for the United States.
  4. The US dollar continues to become less dominant as the decade progresses.
  5. Interest rates move irregularly higher in the developed world.
  6. Country self-interest leads to more trade and political conflicts.
  7. An aging and declining population gives Europe some of Japan’s problems.
  8. World growth is led by emerging market consumers.
  9. Emerging markets weighting in global indices rises by 10 percentage points.
  10. China’s economic and political ascent continues.

Doll’s Advise to Investors

  1. Look for quality in all styles and caps.
  2. Focus on better-positioned sectors – IT, healthcare and telecommunications are his favorite sectors.
  3. Think about geography – Emerging markets, Brazil, in particular.
  4. Gains will be harder to come by – Ongoing volatility and selectivity will be critical.

… the whole article in Economic Forecasts & Opinions HERE