The Fed and the ECB economic stimulus packages are giving the buy signal for risky asset classes, according to the latest quarterly research update from Barclays.
In other words, don’t fight the Fed.
Concerns about weak economic growth remain. Still, liquidity injections are likely to push prices higher for risky asset classes, including stocks.
The bank sees, “sees significant potential upside in cyclically sensitive stocks, which have underperformed recently.”
It also favors, “stocks with bond-like characteristics”. Those include stocks in defensive sectors, stocks with high dividend yields, low volatility investment options and the shares of high-quality large companies in both the U.S. and Europe.
It’s one reason Larry Kantor, Barclays head of research, is recommending a “relatively bullish stance” heading into 2013.
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