Danske Bank: Shares have yielded the highest returns this year

The Nordic financial services provider advised that now is not the time for investors to add risk to their portfolios, as the normalization of economic growth may prevent equities from being valued.

“Economic growth has peaked. Growth gained significant momentum in late spring and early summer, as the introduction of coronavirus vaccines made it possible to remove various restrictions. The unusually strong growth was, as expected, temporary, ” stated Tuukka Kemppainen, Senior Strategist at Danske Bank.

Helsingin sanomat newspaper highlighted that the financial service provider is not the only one with such views. Reuters reported recently, nearly two-thirds of the more than a hundred analysts surveyed believed that a correction — that is, at least a 10 percent decline from the recent peak — is likely to occur by the end of the year.

Danske Bank recalled that while economic growth is expected to slow, it is not expected to come to a complete halt.

“We will maintain a slight overweight in our equities, which means that the share of equities in our portfolios will be slightly higher than we expect in the long term,” Kemppainen said. “But now is not the time for investors to increase risk. We expect stock returns to be 0-5% over the next 12 months, but we expect some risk of a stock market downturn to increase slightly. “

Aleksi Teivainen – HT

Source: The Nordic Page


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