Alan Gayle of RidgeWorth Capital Management said the economy’s transition from “hopes for survival” to “expectations of sustainability” is causing the market to "raise the bars for itself."
“We think there’s going to be some consolidation in here that may go on for at least a short while,” Gayle told CNBC.
“But fundamentally, the market is bottoming out and will move higher from here.”
(Pick Gayle's brain: Watch the video for more.)
Gayle said he thinks the downside risks are now “fairly limited,” and his firm began increasing their equity allocations.
He said that although the financial sector will eventually recover, the process is going to be slower than what most investors are used to.
“We’ve got changing rules that will impact the investing decisions [and] longer-term, we think there’s deleveraging going on, and we think overall growth going forth is going to be slower than what we’re used to and that’s going to impact longer-term financial earnings,” he said.
Gayle also said he thinks the Volatility Index , or Vix, will trend lower through 2009.
“We need to remember that 30 is still relatively high from a historical standpoint,” he said. “So I think that while the VIX has come down fairly significantly, we do see it trending lower through 2009.”
No immediate information was available for Gayle or his firm.
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