Long-term investment outlook now brighter, says BlackRock’s Larry Fink
Asset manager’s CEO sees valuations normalised towards a better long-term PE ratio, but raises concerns on China’s long-term growth outlook
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Genevieve Cua
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THE quick succession of interest rate hikes last year hit the values of stocks and bonds, but long-term investment opportunities have since opened up, says Larry Fink, chief executive of BlackRock, the world’s largest asset manager.
Inflation, Fink told The Business Times in an interview, is set to remain elevated going forward – not at the 7 to 8 per cent levels that the US saw in 2022, but likely at 3.5 to 4 per cent. “All that just means tighter central bank behaviour,” he said.
Until recently in 2022, investors avoided fixed income assets, which produced very low yields, and invested more in alternative assets for higher returns. “Now in 2023, you can invest a large percentage of your portfolio in bonds, and you don’t need to overlay that with so much illiquidity by going into private markets. A lot of valuations have normalised towards a better long-term PE ratio. I look at 2023 as the beginning of long-term opportunities,” he said.
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