Equities are making a comeback and early buyers will benefit from market upswings.
"We're beginning to see a change in sentiment," says David Winters, CEO of Wintergreen Advisors in Milwaukee, WI, and manager of the Renaissance Global Markets Fund.
He adds that for the first time in years, people are letting go of the fear and caution they exercised during the recession.
Indeed, recent Franklin Templeton data suggests sentiment is at its most positive since the market meltdown of 2008.
Though the shift to equities will take time, says Winters, the improving U.S. real estate market has helped boost optimism and fiscal cliff fears are behind us. The only problem is the political landscape in America will continue to cause uncertainty.
One positive sign in Canada is investors—who tend to have a strong home bias—are now looking beyond our borders. Winters advocates for global investing since Canada represents only 4% of global market capitalization.
"There are big opportunities [abroad], and the [first] brave few will be the ones to make money," he adds.
He's fairly cool on bonds, however, which he predicts will suffer not only from rising rates and inflation.
Equity returns are much more favourable; though they "may not be as spectacular as they were in the past, even if [clients] can earn high, single-digit returns over time, that's very compelling," says Winters.
He warns you shouldn't push nervous investors into the market. "People who own no equities should carefully...[get] back in, and do so with a manager who has a proven record, who takes very little risk and thinks long-term."
He adds, "Securities often go up in price [despite low] volume [when] there's not a lot of buyers and when sellers have been selling for almost 10 years. The real money over time will be made in global equities, with a focus outside of North America or the Eurozone."
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