Volatile financial markets. Lowered earnings guidance. The European debt crisis. It's enough to make investors not only nervous, but confused.
During a recent American Beacon Advisors investment forum in New York, asset managers explained how they are reacting to these challenges and discovering new investment opportunities—both domestic and international.
The volatility over the past few months has left Wyatt Crumpler, Vice President of Asset Management at American Beacon Advisors very cautious. “We think now is a good time to be defensive,” Crumpler said. He believes euro zone sovereign debt concerns have elevated risk in the weeks and months ahead.
As the end of the second quarter approaches, Crumpler said earnings may mimic the first quarter. “In the first quarter, we saw topline revenue and sales lines increasing for the first time at a significant pace. We’re expecting that to increase at about the same level that we saw in the first quarter," he said.
The Dow Jones Industrial Average and the S&P 500 are virtually flat year to date, so money managers are looking for growth in the second half of 2010.
Large cap stocks may benefit from the recent market turmoil, according to Patrick Kaser, Portfolio Manager at Brandywine Global Investment Management. He said the volatility has made valuations for large companies very attractive.