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'I'd be in large-cap dividend stocks now', says BlackRock's Rob Kapito

Tuesday, October 14, 2014 - 10:07
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ROB Kapito, president and co-founder of BlackRock, the world's largest asset manager, gave some investment tips at a conference for its clients and the media - PHOTO: BLOOMBERG

ROB Kapito, president and co-founder of BlackRock, the world's largest asset manager, gave some investment tips at a conference for its clients and the media.

"I'd be buying large-cap dividend-paying stocks," he said at the conference in Hong Kong on Tuesday, noting that dividends have always been a large part of stock returns.

"What should you invest in? Open up your refrigerator, you will see many items in there which you'll eat whether the market goes up or the market goes down."

Mr Kapito was speaking on the urgency for people around the world to save for retirement, given longer lives and problems faced by governments and companies in funding their pension plans. He was replying to a question on whether valuations are too high for people to enter.

He said timing the market was impossible.

"What would we do today? A month ago, valuations are very high. Now, equity markets have come down considerably. Are you going to invest? You're going to wait. Next week, the Dow Jones goes up 400 basis points, and you say ah, I should have invested," he said.

"It's the psychology of investors. You're never going to get the timing right."

Findings from the firm's latest global investment survey are disturbing, he said. Investors are holding on to cash while not willing to take any risk with their money. At the same time, more than two-thirds of Asians are concerned that they cannot live comfortably in retirement, he said.

"The longevity challenge can be tackled with the right action, mindset and guidance. You have to educate investors on saving early, saving enough and saving the right way. You can't just leave that money sitting in the bank.

"You have to shift that mindset so the rapidly ageing population understands it's about time in the market, not about timing the market."

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