Double Dip Recession Not Likely
By Yoon Ja-young
Staff Reporter
The global economy isn't likely to fall into double dip, though the recovery will lose steam, a renowned global fund manager from Fidelity said.
"We are in a very strong recovery phase. Next year, it will lose steam, but it is not going to be in double dip," said Anthony Bolton, president of investments at Fidelity International, at a press conference in Seoul, Wednesday.
Bolton was selected as one of the top 10 investment gurus by The Times, along with Warren Buffet, Benjamin Graham and John Templeton, and had recorded an average 19.5-percent annual investment return during his 28-year career as manager of the Fidelity Special Situation Fund.
"Recession in the near term is extremely unlikely," he added.
Regarding an exit strategy, he said a sudden interest rate hike is unlikely due to the negative effect it would have on the economy. Inflation is also unlikely to be a concern for a year or two to come, he added.
Regarding investment, he was positive about emerging markets, especially China. He pointed out that big exporters and commodities countries fared well so far, but added that it won't continue.
"I like emerging countries that can be driven by their domestic market," he said, pointing to concern over low growth in the United States and Europe, which will be a handicap for emerging countries. China, meanwhile, has a good domestic story in spite of its huge exports, according to the guru fund manager.
Regarding commodities, he was cautious, adding that China and India alone won't be able to pull up commodity prices.
He said it still isn't too late to join the stock market. He said the best choice would be buying value stocks. Then the second best option would be buying consumer cyclical stocks. Technology stocks and financial stocks were also among his picks.
"I found that two to three years coming out of a crisis are very good time to buy financial shares," said Bolton, who added that he had witnessed six crises during his career as a fund manager.
He added that he had found more investment opportunities in small cap stocks than large ones.