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7/29/2019 What's Next in 2013
1/16
Russ koesteRIch | jeRey RoseNBeRg | peteR hAyes
whats next in 2013?12 cRItIcAl ANsWeRs oR the yeAR AheAd
7/29/2019 What's Next in 2013
2/16
[ 2 ] w h a t s n e x t i n 2 0 1 3 ?
exi smmarDont Ignore the Upside. Wi min ar brin wi i man
am ri a b inr in ar a, ra
bi an wi m rm main r inr ar n
miin n i. Wi nia ia ar man, w
bi rnii in ri. Bw, w r
ini n riia i an qin ain inr:
Fiscal Cli. A i bnr a bn ar (r nw), b a
inin wi a a. Wi aiina niain m, mar
wi b ai, b n-rm inr n bin rnii.
US Economy. t uni sa wi mainain w b ii rw,
m i in 2012, b n nr a nw rin. l r
rnr rw a ar rr.
Interest Rates and Ination. t 10-ar us trar i
raa ri r 2013 2.25%. Infain rmain in 2%
ran n rw r i ri i.
Europe. t eran cnra Ban (ecB) an am b ain
ri banin a ab. B rrm ar i a
ar r mr awa. In manim, rw i i.
China and Emerging Markets. cina an mrin mar rain
ir rw rari in 2013, in in an wan in
uni sa an er.
Risk-On/Risk-O Redux? Mar ar i rmain ai ar in
ar, b rn mr namna a ari mr.
US Stock Market. Wi ri ar a an aain ar rai
i, w i rnii, ariar in us ma a.
Global Stocks. emrin mar r ar rw, a aain,
wr infain an rai m aii.
Fixed Income. Wa b ri r (i.., trari) a aa
bm ri. or n-rm, w mirain war ri r.
High Yield Bonds. Inr nir iriin ir xr
in i i in an an r ri. t a a nin
r min i an rrn nia, an a ra rmain w.
Municipal Bonds. Mniia bn r min axab qian
i in a ir ax. Mni ar ni ir ax-
xm a.
Volatility. Arnai a a an rai ar inrain
mainram an r rni nan ri iriain.
4
5
5
6
7
8
9
10
11
12
13
14
Russ koesteRIchgba ci Inmn
srai
je RoseNBeRgci Inmn srai
r ix Inm
peteR hAyesha BaR
Mniia Bn gr
7/29/2019 What's Next in 2013
3/16
1 2 c r i t i c a l a n s w e r s o r t h e y e a r a h e a d [ 3 ]
Inin in 2013
SO WHAT DO I DO WITH MY MONEY?TM
3 i a 2013
1
r f
.
2
.
3c
.
RELATED RESOURCES:
s tu at a biain rm
BaR Inmn Ini
ri a mr in- iin
ba rn a ma rinania mar in min ar.
Inr bn in 2012 wi posItIve peRoRMANce
ar m a a, n in aw rzn
rii, nin rw in cina an nin us a rbm.
tan xanin ba mnar i ammain
r inn bwn nania mar rrman an
mr anin namna i.
r 2013, i m wr nqn us a
rbm an b ai. A , w x sloW But
posItIve gRoWth in uni sa, anr ar
r er, b imrin niin in mrin mar. In
nar rm, aii wi i rmain i, b niin
ma gRAduAlly IMpRove As MoRe clARIty eMeRges.
In win a, w ri r b anwr 12 riia
i an qin min r min ar, an r
inmn ia r inr ri.
http://www2.blackrock.com/global/home/BlackRockInvestmentInstitute/2013-Investment-Outlook/index.htmhttp://www2.blackrock.com/global/home/BlackRockInvestmentInstitute/2013-Investment-Outlook/index.htm7/29/2019 What's Next in 2013
4/16
[ 4 ] w h a t s n e x t i n 2 0 1 3 ?
12 criia Anwrr yar Aa
The New Year began with Congress fnally agreeing to a partial deal to avoid
(or at least delay) the worst o the much-discussed fscal cli o scheduled
tax increases and spending cuts. However, given the need or additional
negotiations, expect market volatility and an additional drag on the economy.
t a i a ar in ar mrnin Nw yar i br an
nin, b i imi an n r aiina niain wi i
rana in a ra n us nm an inra aii r nania
mar. si a in a rmann xnin B-ra ax
ra r iniia wi inm $400,000 an wi inm
$450,000 an a rmann maximm 15% ax ra n iin inm an aiaain r iniia an in am ax bra, wi a 20% ra
r wi ir inm. In aiin, Arnai Minimm tax a
rmann a, nmmn bn wr xn r anr ar an,
nin nwn a qr wr a r w mn.
sinian, a i n in an xnin ar ax ia, an
nimn rrm, an rrrin rna r rra ax r an
inra b iin. t armn miia ima
ax i an nin , b i i ar inm in man wa.
t mrmi wi i r a m a ra, ai ar nr-
rm b an ain uni sa ( ar), an a b
iin a an nr, nar-rm i. on r an, nar-rm aii rrn bin rnii r inr wi nr im rizn.
hw wi ia i,ax i an ninii b r?
Near-term volatility
could represent
good buying
opportunities or
investors with longer
time horizons .
1
an UnsUstainable long-term iscal PictUre
0
200
150
100
50
250%
2000 2004 2008 2012 2016 2020 2024 2028 2032 2037
DEBT-TO-GDP
Source: Congressional Budget Office, Alternative Fiscal Scenario. Note: This scenario assumes that certain policies that have been inplace for a number of years will be continued, including the Bush-era tax rates, AMT relief, payments to doctors, but not including BudgetControl Act spending reductions. Note, however, that at $109bn/yr, and at current nominal GDP of just under $16 trillion, those spendingreductions would amount to less than 1% of GDP.
7/29/2019 What's Next in 2013
5/16
1 2 c r i t i c a l a n s w e r s o r t h e y e a r a h e a d [ 5 ]
We project US growth will remain slow, but positive (much like 2012). As it seems
the worst-case fscal cli scenario has been averted, we do not orsee another
US recession in 2013.
Wi w n bi us nm wi rii rin in 2013, a bi ri
xi i a rn b iin nrmin nn, r, in wr a
nari, ann b r an a mr a ra. In, r ba a
a r a ninain a w rr wi mr ri in ar ar
ar (ra a i i) an inra rw nia a ar
rr. t ri i ar imiar 2012 ia, wi mi
i mia arn axain an nin minain r nrn. hwr,
imran, m ba ri a n, a a ar anin in
cina an an ri a rzn, wi nrib r rai
imim n us nmi .
ora, w w ra a rw ra in uni sa arn 2% r
2013 ( win ar). s bm ar rw, a nmr
rain an a inin, wi rn rw rm arain qi.
hwr, nm a b rm a rnnin in mar
an a rb us nr r.
i U su , u u ?
the Us economy is on a 2% growth Path
2
Barring a debacle in the looming debt ceiling debate, interest rates should
modestly rise through 2013, targeting 2.25% on the 10-year Treasury by yearend. Ination should remain in the 2% range unless growth or oil prices spike.
or r inr ra in 2013 i n m min b
iin ba, in wi w nin aniia an aian a a
wr a nari a ra 2011 ba. ti m w r
a m r i in ra r ar 2.25% r 10-ar us trar.
cnin i ammain i imi r m mr in
inra in 2013. hwr, wr imar ai m an armn
i ?
3
110
100
120
90
130
2006 2007 2008 2009 2010 2011 2012
Core Shipments Real Goods (Personal Consumption Expenditures)
Private Employment
INDEXLEVEL(RECESSIONT
ROUGH=100)
Sources: JP Morgan, Bureau of Labor Statistics, Census Bureau, Bureau of Economic Analysis. Data through 4Q 2012. Note that thelatest quarterly observations are preliminary, based on payrolls through November and shipments and PCE through October.
7/29/2019 What's Next in 2013
6/16
[ 6 ] w h a t s n e x t i n 2 0 1 3 ?
Interest rates should
modestly rise through
2013, targeting 2.25%
on the 10-year Treasury
by year end.
The ECB changed the game by taking the most extreme risks o a banking
collapse o the table. But key reorms are likely a year or more away. In the
meantime, growth is elusive.
ecB prin Mari drai, ba b grman, an am b in war wa nar a r, in ar b bin r-rm bn
rira nri a sain an Ia. In mi 2012, prin
drai, wn rrrin ecB an, a, Bi m, i wi b n.
r im bin, w a im a i wr. (s ar win wn prin
drai ma i mmimn.). rrmr, a irain gr b
bai ar inia ir er gr in rzn,
aiain, r im bin, ar a gr xi (r grxi) a a a
er an nania mar arir in ar.
t ecB ain b iiian im an miia ri a rii. hwr,
ecB Ban-Ai ar a. I i n a in nr-rm nania
an nmi rbm rzn. In, m rrm a b na an rbab wi n b ni ar grman ra in in a.
In manim, rw wi b i. pimar a bn i a
aiin Arman, b a a rmin an nmi rr. ti a
xrm a aain eran mani, ia n a
ri m ir rn an r rm ra. Anr nia br
r eran ri a: ninn w ar w nwn, a i rr
w a n wa war anin inr nimn.
n n nin nar ra an armn n raiin
b iin, i i i a inr ra w rmain w r nr ami
xn nmi nrain. on r an, r infain
aar mr ar bnin, xin ai an nr mnn.
W x infain wi a a a r nw in a wa an
bn rr an b rw nirnmn.
uima, w bi a i niain wi b n ii
(i n wi anan iia rama a ma a r-rm b
nrain). ain r ba a a 2% nmi rw. cmbin wi
rin in ri a rzn bra an a cina nmi ar anin,
fi--a in trari bi in 2013, ain r iw
r m inra in inr ra. hwr, ami ninin bar
rr an wa b mar, w bi ra Rr wi mainain i
a rm n n qaniai ain a r nania mar
a infain an nin w inr ra.
ina, w ii ri r r m inrain ra. r
a ra ar, xain r riin ra a bn a a xrna
ri in nmi nr ain, inra man r trari,
an mr ra Rr bn bin. or ra r ir ra in 2013 i
mr m an in a, rfin nrn. y ra n
n wr in 2013 nr arnai nari -infi a i
ama, r i anr b xrna ri, wr rm er, Mi
r ar ea r r , wr aain ari.
ru u: w eup?
4
7/29/2019 What's Next in 2013
7/16
1 2 c r i t i c a l a n s w e r s o r t h e y e a r a h e a d [ 7 ]
Investors in the US
and around the globe
should be encouraged,
as a continuation othese trends should
provide some cushion
against weaknesses in
the US and Europe.
China and other emerging markets should regain their growth trajectories in
2013, helping cushion any weaknesses in the US and Europe.
Rn in a in imrin nmi niin in mrin mar
in nra an in cina ia. emrin mar rw a a n a
rai bai in rn ar, b in r iw a man mar ri ar
rin, w x mrin mar rain mmnm. W x Brazi an
Inia m imrmn in rw. A b nri r rm mir-
nmi awin, a mr bania arain wi b nn n mr
rra rrm. cina, in ariar, i ain a rr, wi manarin
an rai a arain an xr aarin abiiz ( ar bw).tan r, inr in us an arn b b nra,
a a ninain rn ri m in aain
wan in us an er.
4
0
8%
8/11 10/11 12/11 2/12 4/12 6/12 8/12 11/12
YIELD
SPAIN
Believe me, it will be enough.
MARIO DRAGHI, ECB President
I T A L Y
ecb to the rescUei sp 2-y u c
w u c ? w p, ?
5
Source: Bloomberg, as of 12/19/12.
9
8
7
6
5
10%
47
53
51
49
55
57
9/10 12/10 3/11 6/11 9/11 12/11 3/12 6/12 9/12 11/12
Real GDP (LHS) Manufacturing PMI (RHS)
GROWT
HIN
DEX
china recovery shoUld cUshion the Us and eUroPe
Source: Bloomberg, as of 11/30/12.
7/29/2019 What's Next in 2013
8/16
[ 8 ] w h a t s n e x t i n 2 0 1 3 ?
cina nw nrain ari i bin rm a nain m
b rnin a rnr rm n qarr nmi wwn. Inmn an
ain mnar i a ai rn in nm, in r
qarr 2012 nmi iniar in ii rrir r 2011. Wr
rrman an b mainain r n rn n riia n i
i inmin ar ari.
can wi m w. In Mar 2013, ia rw ar wi i b
a 7% a Naina p cnr cnrn. Aiina, rrm an
ii n b immn mwr cin nmr. drawin n
rm ri wr raniin, inian marnmi i an rrm
i wn b inr ni a in 2013. lnr rm, r cina wi
n riia n a an ambiin nr-rn rra rrm
in cina a ar rqir wan i rm i raiina rian n xr an
inmn- rw war a mr baan an ainab rw nami.
B rrn rar a cina rrar an
raba rw r min ar.
2012: a year o risk-on then risk-o
Change will come
slowly, but the
current trajectory
suggests that Chinashould support
rather than drag
global growth or
the coming years.
With continued budget negotiations, markets are likely to remain volatile early in
the year, but should respond more to undamentals i risks are averted.
A 2012 wa a ar in wi mar aar wr ai, i rmain a
ar ri-n/ri- rain a inr nin ra mn
in er ar in ar an iia rn in us a ar rw a .
t ar bw w a wi r r r 2012 an x
inm ra , i wa ar a m ri. An ar-ar ra b in mi-
ar ar-in ri arin a ima mr in mix rrman.
In nar rm, ni w mr ari n uni sa b rbm,
w x mar wi rmain ai. hwr, wi ra 2012 ri
aa a w nr 2013, inr a mr ii rn r mar an ri a in nra.
w 2013 p -/- 2012?
6
Source: Bloomberg, as of 1/3/13.
1,400
1,300
1,200
1,100
1,500
1.0
1.5
2.0
2.5%
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT DECNOV
INDEXLEVEL
YIELD
S&P 500 (LHS) 10-Year Treasury Yield ( RHS)
7/29/2019 What's Next in 2013
9/16
1 2 c r i t i c a l a n s w e r s o r t h e y e a r a h e a d [ 9 ]
While risks are elevated and valuations or US equities are relatively high,
we still see opportunities, particularly in US mega caps.
W nra i qii r 2013, b w ar n namr. us mani r
b mri ba, n rr r marin an a bn n a n-
rm rn rrmin r mar. In r iw, i rn ain
r mar ma b narin an n. ti i n a, wr, a
rnii ann b n in us in ariar, w a a arab
iw war ar us qii.
Ma a in uni sa rrm r in 2012, i aar
a b m mri ( ar). In aiin, ar i m rab
mn mar wi a rrn-n-qi in x r , an man
r iin a a rm ri. An i r r an inrin ni
a in i xr ar rwin inrnaina mar, main i
nii an in mi rw.
A an aiina nirain, i imar ann r n
b i, w w x a - in ri a. In i nx, r
inr wrri ab nin a rbm r an r -inwwn, us ma-a mani nrab an r ,
ariar mi an ma a.
w u Us ? w p ppu ?
7
valUations by market caP: 1997 to Present
1997 2001 20031999 20072005 2009 2011
Mega Cap (S&P 100) Small Cap (S&P 600)Mid Cap (S&P 400)Large Cap (S&P 500)
5
10
15
20
25
30
35
PRICE-TO-EARNINGS
RATIO
VULNERABILITY
MORE+
LESS
Source: Bloomberg, as of 1/1/13.
7/29/2019 What's Next in 2013
10/16
[ 1 0 ] w h a t s n e x t i n 2 0 1 3 ?
long-term stock Perormance:
emerging markets oUtPerorm develoPedP msci em . msci w, 20022012
Our avorite long-term theme is emerging markets (EMs) or aster growth,
cheap valuations, lower ination and more muted volatility.
oi uni sa, w ar mar nri an
rnii in nrrn er. B r ari n-rm m i mrin
mar. di raiin in 2012, inr nir iin wi eM r
r ran: ar rw ( ar), a aain, wr infain an wr
rai aii.
sarin wi rw, w n x eM nri rrn ir 2010 a
anim n (r, in a cina, r). ta ai, wi w x wr
rw, rai bwn mrin mar an mar rw i i
rmain rm in ar eM. d nri nin r wi
r drain, b an mrai. In marin, eM nmi
ar nmbr b b, n mr ainab a ii an, r
m ar, a m mr arab mrai.
di i aana, eM ar rain a a inian inr
20% mar qii. hiria, i a rrn a
nr in. Aiina, w w ar a wi i mr ai in anab n, rai aii bwn mrin an mar
a i nrin. W x i rn nin, an xn a
rai ri eM a i rin, inr nir inrain
aain i ara mar.
o r, inr n rmmbr a mrin mar arr wi m
m i ri, inin ra rin rrn, imi iqii,
rnmn rain an ibii bania aii
ar iia, nmi r r mn.
w p qu?
8
Source: Bloomberg, as of 12/31/12. Past performance is no gua rantee of future results. It is not possible to invest directlyin an index. Emerging markets represented by MSCI EM Index, developed markets represented by MSCI World Index.
0
200
100
300
400
Emerging Markets Developed Markets
INDEXLEVEL
20122011201020092008200720062005200420032002
Despite trailing in2012, investors shouldconsider sticking
with the EM theme
or our reasons:
aster growth, cheap
valuations, lowerination and lower
relative volatility.
7/29/2019 What's Next in 2013
11/16
1 2 c r i t i c a l a n s w e r s o r t h e y e a r a h e a d [ 1 1 ]
The secular bull market in Treasuries is over and what used to be risk ree
(i.e., Treasuries) has actually become risky. Over the long term, we suggest
migrating toward credit sectors.
A i arir, r r a r a m inra in ra, b
ri nari wr ra (ar xrinin i r a a r ar)
a b anw. siin wi raiina r x inm i us
trari r a aia a-an r fi--a mar. Rin
n b i, wr, i ri inr nrain an w
i inr ra (an ri). hn, n a ri bai, ain inr
ra ri ri a iin ma n in nrain m,
b r r ar m xr inr ra wi a a
ra n ri rrman.
or nr rm, inr b rin rrin ir x
inm ri aa inr-ra-nii r. cnra ban
mnar im wi ra w r rab r, b w bi
biaan ria i r irin. gin rwar, ra
imb, amin m rw in uni sa an a rin in xrna
r a rzn rii an inrna us a nraini. sia,
w x inr ra ri m r 2013 arn 2.25% r
10-ar us trar. An wa, min b iin ba, an wi a
r nraini, wi man a nirab ran in ra, nia a
ar a 50 bai in n ir i a 2.25% ra.
A m, an inra in ra ii ri in nr-rain,
inr-ra-nii x inm a rnmn bn. t inmn
an b ra b x inm r rin a br baan ri an
rwar: ri ara a rra, i i an mniia b, mrin
mar an ri mn mra mar. Inr an r
inr ra niii b aain awa rm raiina bnmar
r ma n an war fxib n a a rar aai r inr ra ri an a ran ri ri r.
i 30- u ? h u p p?
9
Source: Lipper. All Information as of 11/30/12. AUM in billions.
0
2
4
6
8
10
0
200
400
600
800
1,000
1996 2000 2004 2008 20121992
Lipper Short Invest Grade Lipper Interm Invest GradeBarclays US Agg Bond
INDEX
YIELD
DEBTFU
NDSAUM
risk-ree has become the new riskyb Us a b i y . aUm g lpp s
i g d u
Going orward, rates
should climb, assum-
ing modest growth in
the United States and
a reduction in exter-
nal stresses such as
the eurozone crisis
and internal US
fscal uncertainties.
7/29/2019 What's Next in 2013
12/16
[ 1 2 ] w h a t s n e x t i n 2 0 1 3 ?
high yield still has room to rUn
High yield still looks attractive as yields continue to more than adequately
compensate or risks. The asset class continues to oer compelling yield
and return potential, and deault rates remain low. However, valuations in
traditional high yield bonds are not as attractive as in recent years, limiting
return potential in 2013. Investors should consider diversiying their exposures
in high yield to include loans and secured credit.
Bra, a rmn ammai mnar nirnmn r
rrain a b mar an rnanin in. ta
a ri w, wi ri wnin ri inrmn. W x
a ra rmain w n in a wa rw nirnmn. crra a
ri i n a ira a i i brrwr a a
mar rnan b, rin inr xn, xnin marii an
brin ir rm.
rrmr, man wa mani (a w a m ari nr)
wr wi in 20082009 nania rii, ain bin a mar wi
ra rnr baan , nabin m rar abii war an
nmi wnrn. ta n man i i wn a i b ri-;
in in rm wr i in 2013 man a n b mr aia
wi a a an in a ar. lwr arin i an ir arin
ri man wrin a a rrn rin in 2013 rm a w
ar b-ii rrn in mi i in ii r 2013.
A , inr nir iriin ir xr in i i
in an an r ri. t r i a mr min aain
an ia i i bn. ora, wi i nrain wr rrn in 2013,
i i, an an r bn a a i r arai i in
nx am ba iqii a a ri a ba in 2013.
a u ?
10
0
500
1000
1500
2000
0
4
8
12
16%
1990 2004 2008 20121986
Trailing 12 Month Default RateSpread-to-Worst (bps)
SPREAD-TO-WORST(BPS)
TRAILING12MONTH
DEFAULTRATE
Source: JP Morgan. As of 11/30/12. Fixed income yields are represented by yield to worst (The lowest potential yield that canbe received on a bond without the issuer actually defaulting (e.g., through prepayment provisions)). Spread is the differencebetween the yields of two bonds with differing credit ratings.
High yield still looks
attractive as yields
continue to more than
adequately compen-
sate or risks.
7/29/2019 What's Next in 2013
13/16
1 2 c r i t i c a l a n s w e r s o r t h e y e a r a h e a d [ 1 3 ]
w u up? u, ppu u?
11Municipal bonds oer compelling taxable equivalent yields in the ace o higher
taxes. Despite chatter in Washington, munis are unlikely to lose their tax-exempt
status.
Mniia bn r min axab qian i in nx ir
ax. Wi in iminain r imiin r ax-xm a
nin ra in ain, w bi inr n b ar .
In a, w in brar ax rrm wi b i ai in w ranr
niain a bn bwn cnr an rin. t rmbin
ar nin nw, an wi w bi r b amn, w n
bi ax xmin wi b imina. s a an w r imair
mniiaii abii n ir rain an ain ir mmnii.
r inr in inm an a, w bi ax-xm mniia bn
r a rai us trari, r xam. ta, inr an bain a
inian ir i rm an inx nra biain mniia bn an
rm a marab inx n-a trari ( ar bw). W bi an
inmn in mniia bn i ra b wa mr wa arn.
Inr rmmbr a r ma b inrmain aaiab n nania niin ir mniia rii an r bi rrain.
Aiina, mar r rain mniia bn ma b iqi
an r axab bn an a rin mniia bn inm ma b axab
(ia, m inr ma b b Arnai Minimm tax (AMt)
an aia ain iribin, i an, ar axab).
50
100
125
75
R
ATIO
150
175%
10-Year Average
2007 2008 2009 2010 2011 2012
mUniciPal bonds are oUtyielding treasUries10-y mu--tu y r, 20072012
Sources: J.P. Morgan and Bloomberg.Notes: Daily yield on 10-year, AAA municipal bonds vs. yield of 10-year US Treasuries, as of 12/31/12.
7/29/2019 What's Next in 2013
14/16
[ 1 4 ] w h a t s n e x t i n 2 0 1 3 ?
h i u p?
12Alternative asset classes and strategies have become mainstream and oer
the opportunity to enhance portolio diversifcation. We suggest investors
consider proessionally-managed, exible mandates that allow portolio
managers to take advantage o tactical opportunities.
Wi aii a nra ri inr ri in nrain a, nmi
an rar wr, i a nir a wir arra in ai r
a. In, arnai inmn ar aarnai raiina
an bn inmn ba n a a n ba irn
in a ri.
Wi arnai iria a bn aaiab n r nrir
ria n (wi i a a r r man inr), a ar a
aaiab r a rai nw innain: arnai n-n ma n.
Ma n ar in ri bn ai iqii, i
ranarn an w inmn minimm. Inrain, a nmbr ma
n rir a bn rin n a ri a bn wi
a rin xr arnai rai, a fxib mana, n/
r inmn, ra a an mmii.
A inmn nai ri, an arnai a a w ir wn. Inmn
a n an ria qi n n na in ai in-mn ara, an in in i rrn, an nai in
ri (inin nia r a x rinia amn in).
A, inmn a n ri rar riin r aain an
n m mx ax rr. Mr nra, m arnai in-
mn a xrin ri xrm aii.
alternatives or all investors
op-e muu u r c-e/P u U P u
a N/w barrir inin
tia rqir $1 miin r mrin n wr
ua rqir $5 miinr mr in inab a
iU
Mr nrain brar rriin
Brar rni lar rni
tp hi Mra i tia imi
mu lw
(ia arin a $1,000)
Mra
(ia $10,000 $50,000)
hi
(ia $100,000 r mr)
lqu dai prii (ia mn qarr) prii (ia qarr r nr)
Manamn + r xn
Manamn + r xn; mab iribin an/r rrman
Manamn + r xn; i b iribin an rrman
a, tp, lqu g P e ru
Source: BlackRock.
7/29/2019 What's Next in 2013
15/16
1 2 c r i t i c a l a n s w e r s o r t h e y e a r a h e a d [ 1 5 ]
r br r wr, w bi 2013 i i b a ar wn mar a
wi n aain r ar in an iiian an imar. Aiin a
b armn air, wi ra rr n n-rm us a
, an rra rrm in er, na rra nin, ri
ain an rr m inr nn. r nw, w rmain ai
imii, b ar nizan a ar wr n rrr ba
nm rmain. gin i , w r ia r rnin r 12 Anwr
in in r inr ri.
THREE INVESTMENT ACTIONS FOR 2013
1 2 3
trnin Anwr InInmn Ain
r i n w
Allocate to lexible core
bond alternatives
}cr aain a r
nnra inr ra ri
wi imi i nia.
Increase exposure to
credit sectors
}hi i, ban an, mrin
mar b, mniia an
r ara mar an
r nan i, inm,
rrn an iriiain
rnii.
Seek out non-correlated sources
o return
}l r rai a an
inra iriiain an
m aii.
g a v
Invest in high-quality dividend
paying equities rom around
the world
}exan xr inrnaina
, inin mrin
mar an us mani wi
inrnaina xr. gain
xr mar
mar a w.
Allocate to lexible, unconstrained
strategies
}l r ba rrn
rnii ar a
a an rai.
Build a portolio to manage
volatility
}vaii a b wi rmain
i rai iri ;
irin a m ri r
ir r rrn wi
b riia.
c w n i
Look beyond traditional income
sources to build a diversiied,
risk-managed income portolio
}cnir iin-ain
qii an xib inm-
rin inmn rai
iri r inm.
Construct diverse sources
o income streams within
ixed income
}hi i bn nin
arai r
n-rm, a ban an
an rr bn.
Increase allocations
to municipal bonds
}Mni bn r min
axab qian i in
a ir r ax.
7/29/2019 What's Next in 2013
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Not FDIC Insured May Lose Value No Bank Guarantee
The opinions presented are as of January 2013, and may change as subsequent conditions vary. Individual portfolio managers for BlackRock may have opinions and/or make investment decisions that, incertain respects, may not be consistent with the information contained in this report. This material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation,offer or solicitation to buy or sell any securities or to adopt any investment strategy. The information and opinions contained in this material are derived from proprietary and nonproprietary sources deemed byBlackRock to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy. Past performance does not guarantee future results. There is no guarantee that any forecasts made will come topass. Reliance upon information in this material is at the sole discretion of the reader.
The information provided here is neither tax nor legal advice. Investors should speak to their tax professional for specific information regarding their tax situation. No investment is risk free. International investinginvolves additional risks, including risks related to foreign currency, limited liquidity, less government regulation and the possibility of substantial volatility due to adverse political, economic or other developments.The two main risks related to fixed income investing are interest rate risk and credit risk. Typically, when interest rates rise, there is a corresponding decline in the market value of bonds. Credit risk refers tothe possibility that the issuer of the bond will not be able to make principal and interest payments. Investments in commodities may entail significant risks and can be significantly affected by events such asvariations in the commodities markets, weather, disease, embargoes, international, political and economic developments, the success of exploration projects, tax and other government regulations, as well asother factors. Index performance is shown for illustrative purposes only. You cannot invest directly in an index.
FOR MORE INFORMATION: www.blackrock.com
2013 BlackRock, Inc. A ll Rights Reserved. BLACKROCK, BLACKROCK SOLUTIONS, iSHARES, SO WHAT DO I DO WITH MY MONEY,INVESTING FOR A NEW WORLD and BUILT FOR THESE TIMES are registered and unregistered trademarks of BlackRock, Inc. or itssubsidiaries in the United States and elsewhere. All other trademarks are those of their respective owners.
Lit. No. INV-OUTLOOK13 AC6451-0113 / USR-1285
W i BaRA wr ar inmn manar, a BaR w bi i
r rnibii inr a iz in Nw Wr
Inin. W wr bi ri ba mar ini, bra
aabiii, nbia inmn ai an ri manamn
xri im rqir.
The Resources You Need or a New World o Investing
Inin wi BaR i a r a a, ra
an inmn , a w a xni mar inin an ri
anai, bi nami, ir ri im rqir.
The Best Thinking You Need to Uncover Opportunity
Wi r in a rnr b, r 100 inmn am in 27
nri ar ir b inin rana a ini in ainab
ia a ri ir br, mr nin rrn r im.
The Risk Management You Need or Peace o Mind
Wi mr an 1,000 ri rina an rmir ri manamn
n, BaR i in aa nran ri a
a b mana r rrn r in n an brin ari
m anin inania iain.
BlackRock. Investing or a New World.