BlackRock's Laurence Fink is not concerned with the current "soft patch" in the U.S. economy or the Dow industrials' fall below 12000.
In the long-term, he believes dividend-paying stocks will be a better investment than bonds.
"I'm not worried about a short-term movement," the chief executive of the mutual-fund and exchange-traded fund company told CNBC Friday. Looking five to 10 years down the road, investors will gain if they own large-cap, global stocks that pay dividends — even under a bearish scenario.
If anything, under that scenario, "I’d be a bigger buyer today. But I’m not focusing on a quarterly move, I’m focusing on a five- to 10-year horizon." Fink did not name particular stocks.
Once the Federal Reserve's quantitative easing program, or QE2, ends this month he expects private sector demand to pick up for U.S. Treasury bonds. "There is a need for bonds more than ever before, especially if you’re converting your pension plan from a defined benefit to a defined contribution" plan, he said.
Fink sees no reason for a QE3.
"We still have positive growth. I think expectations earlier this year were way too high" for 3 percent or higher gross domestic product, Fink said. He sees the current 2 percent to 2.5 percent range continuing for the rest of the year.
Fink understands why investors areturning to bonds now—they're "frightened of the world and all these issues we have in front of us." But he is also baffled why they are concerned about the end of the Fed program because "it's been telegraphed for months and months and months."
Fink said whatever is worked out in Congress to reduce the federal deficit, Washington must work with the private sector if it wants to spark economic and job growth.
"If the private sector does not increase activities in this country, then we’re going to have subpar growth for many years to come and we’re going to have a harder time for job growth," Fink warned. "I believe the private sector is in a great position. They’ve never had this large a cash position."
But if Washington "overplays its hand" and puts too many "constraints on the private sector in the hope of making sure we don’t have another blowup, if it’s too restrictive, we will inhibit that type of growth," Fink said.