Despite equity markets sitting at record highs Morgan Stanley have a thesis for remaining invested in shares

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Despite equity markets sitting at record highs Morgan Stanley have a thesis for remaining invested in shares. We remain bullish on both international and domestic equity markets, reflecting abundant liquidity conditions, attractive valuation, positive-to-robust earnings growth and positive equity supply-demand conditions. They have identified four areas of risk to monitor and their views on each of these risks. 1) Geopolitical events: Current major Geopolitical risks directly affect about 4% world GDP. 2) The Fed falling behind the curve: Morgan Stanley notes the markets appear very relaxed about the Fed making such a policy mistake. 3) Bond rally: Morgan Stanley sees bonds as overvalued, however, it does not expect an abrupt, disruptive selloff. The firm is managing this risk by being underweight fixed-income securities 4) Signs of Excess: Often precursors to market peaks, Morgan Stanley isn't seeing any signs that are particularly worrisome. Read the full article via Smart Investor: (VIEW LINK)


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