Stocks are still in the grip of a secular bull market, but investors shouldn't expect the same level of returns seen in 2009 and there is a risk of 20-percent corrections, Mark Mobius, executive chairman at Templeton Asset Management, told CNBC Thursday.
"In a secular bull market, where we are now, you will see corrections can be as much as 15-20 percent, but we shouldn't be concerned that this represents a bear market," Mobius said.
"A 20 percent correction is not unusual, we've seen it in China already last year … so you will see that on an individual market basis," he said.
Investors won't see the same strong gains in stocks that characterized 2009 because markets aren't starting from the same depressed level, Mobius said. But the underlying momentum should continue to pull markets higher and investors should be ready to participate when corrections appear, he said.
"I'm telling my clients, don't expect the 50 percent or 60 percent that we saw last year," Mobius said.
- Watch the first part of the Mark Mobius interview above and the second part here >>>
Even though stocks rose sharply in 2009, the market is not entering bubble territory, according to Mobius.
Mobius sees loose monetary policy remaining in place for the rest of the year in the U.S.
"I don't see tightening until the end of this year and maybe the beginning of next year and there's one very simple reason: unemployment," he said.
Mobius said he thinks that the two biggest threats facing the global economy are the derivatives market and tightening money supply.
"If money supply starts heading down, that would be a bad sign for markets generally," he said.
Mobius is bullish on emerging markets and has around 10 percent of his emerging market portfolio in Chinese stocks.