What bubble? We are still buying US stocks: UBS

by Alex Friedman | November 26, 2013

Originally written by Leslie Shaffer at CNBC | November 26, 2013

While many analysts fear that quantitative easing is blowing a bubble in U.S. stocks, UBS is increasing its allocation, citing earnings expectations.

“While there are some concerns, ultimately, long-term investors should only care whether sentiment has pushed valuations beyond reasonable levels,” said Alexander Friedman, the global chief investment officer for UBS wealth management, in a note. “In short, it has not: investors need not fear that we are in the midst of a dangerous bubble in risk assets.”

While share valuations based on price-to-earnings ratios and cyclically adjusted earnings yields have risen to fair to slightly high levels, earnings growth may drive price appreciation, he said. But Friedman added, investors shouldn’t expect a repeat of the more than 15 percent annualized returns seen over the last five years, with annual returns of 7-8 percent more likely. Continue Reading.

Head here to never miss an article

Filed Under: Economics

About the Author

Alex Friedman

Alex is the co-founder of Jackson Hole Economics, a non-profit research organization which provides analysis of key topics in the political economy, and develops actionable ideas for how sustainable growth can be achieved

Alex is also the co-founder and Chief Executive Officer of Novata, a mission-driven and technology-powered public benefit corporation designed to improve the process of Environmental, Social, and Governance (ESG) diligence in the private markets. Backed by a unique consortium, which includes the Ford Foundation, S&P Global, Hamilton Lane and Omidyar Network, Novata has created an independent, unbiased and flexible platform for the private markets to more consistently measure, analyze and report on relevant ESG data.

With two decades of experience in the financial and non-profit spaces, Alex has led a number of sustainable growth and transformation efforts. He is a former CEO of GAM Holdings and Chief Investment Officer of UBS, and also served as the Chief Financial Officer of the Bill & Melinda Gates Foundation, where he created the foundation's strategic investment fund.

Alex was a White House Fellow and an assistant to the Secretary of Defense. He is a member of the Board of Directors of Franklin Resources, Inc. (Franklin Templeton), a member of the Council on Foreign Relations, Chair of the Advisory Board of Project Syndicate and a board member of the American Alpine Club. Alex also writes regularly for various news outlets and is the author of Babu's Bindi and The Big Thing: Brave Bea, both children's books.

Alex holds a JD from Columbia Law School, where he was a Harlan Fiske Stone Scholar, an MBA from Columbia Business School, and a BA from Princeton University.

← previous post next post →