MainStay Market Minute: Stimulating Global Growth

NEW YORK - March 28, 2016 - PRLog -- Poul Kristensen and Charles Reinhard, Managing Directors for New York Life MainStay Investments, provide their views on the efforts made by the central banks to revitalize growth in the market and share their insights into possible opportunities for investors.

As Poul and Charles report, central banks are trying to revive growth and improve financial stability by reaching the 2% growth mark.   Just last week, the Fed issued a statement reducing the number of expected rate hikes for the year from 4 to 2, while Europe and Japan have been operating at negative interest rates.  The European central bank is buying 80 billion euros a month in bonds and will be buying non-bank corporates beginning in April while The People's Bank of China lowered their reserve requirement to help boost lending.

Given the outlook for low growth, inflation, and interest rates, Charles remarks, "We think opportunities exist for investors trying to manage volatility and generate income in bonds that look like stocks, and stocks that look like bonds."  Likewise, current high-yield spreads are historically high which should provide a cushion if default rates rise, as the market is discounting a higher default scenario than they believe is likely.

In the equity sector, stocks that pay a dividend tend to produce a higher return than stocks that do not pay a dividend.  With this in mind, Charles reports that as expected, dividend-paying US stocks have reported lower volatility on average, while dividend yields for global equities have been reported at over 3% in some indices.  However, Poul cautions, "If you're investing outside the US, it's important to be mindful of the currency risk.  We believe a thoughtful approach is a 50% currency hedge."

To watch this interview and future updates from New York Life MainStay, tune into Asset TV's New York Life MainStay Investments Channel Page: http://bit.ly/1RBHcS1


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