3 reasons why it's the perfect time to buy stocks, according to a senior portfolio manager at Morgan Stanley
Morgan StanleyInvestment Management's Andrew Slimmon says that now is the time for investors to buy stocks — and the environment won't be the same in a matter of months.
- Given the bull rally in 2020, this year could be a more challenging investment environment.
- "Investing simply gets tougher in this second year," Slimmon said.
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A series of record-setting rallies and a surge of participation from retail investors has spurred talk of bubble in the
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P/E ratios are extremely favorableThe majority of companies surpassed expectations in the most recent earnings season. Slimmon said while prices are starting to rise, it is still "not to the level where the P matches the E." He added that investors should expect stocks across the market to continue to rise.
Market breadth is 'incredible'In 2020, large-cap technology companies led by Apple, Amazon, Netflix soared, driven by stay-at-home orders amidst coronavirus pandemic. But while the focus has been on Big Tech names, Slimmon said that there is a whole group of "reopening stocks", from Starbucks to United Airlines, that stand to gain and outperform once the economy opens back up. The Fed is letting the economy run hot
Prices will continue to rise, Slimmon said, so investors should act now. Central bank Chairman Jerome Powell has said he will allow inflation to overshoot in order to support the country's economic recovery.
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