What's behind the run-up in the stock market recently is the prospect of more quantitative easing,or asset purchases by the Federal Reserve,Russ Koesterich agrees with many other analysts.Mr.Koesterich,head of Investment Strategy for Scientific Active Equities at BlackRock,the world's largest money manager,thinks we're running up against a wall here-the upper end of the trading range.We're likely to see sluggish growth,which is not gonna support earnings growth.Expect 1.5-2% growth in 2011,which is way off 2009 levels.
The market's 2011 earnings expectations may be too high based on the predicted sluggish growth.The key thing for investors in handling slow growth is a barbell portfolio.This might consist of consumer staples and health care on one end,and industrials and tech on the other for global exposure.
Mr.Koesterich recommends avoiding stocks that are too closely linked to U.S. growth,given how slow that is likely to be.For example,several retailers are heavily exposed to the U.S. economy,as are many banks and utilities.
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