John F. Vail, chief global strategist at Nikko Asset Management, one of Asia's largest regional asset managers, said the firm cut its overweight stance in equities for the first time in nearly 3 years, lowering its allocation to neutral. Vail cited geopolitical risk as a key concern.
Volatility in equity markets has shaken the nerves of investors, said Jeff Kleintop, chief market strategist for LPL Financial. He said that led to outflows from funds that invest in U.S. stocks last week after net inflows in five of the past six months, according to data from ICI.
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"While stocks were relatively unchanged last week, daily and intra-day volatility has been notable—the S&P 500 saw 1 percent intraday moves on Tuesday, Wednesday, and Thursday," said Kleintop.
"So, while ongoing volatility with pullbacks of 5 percent or more is likely, a bear market—defined by a decline of 20 percent or more—is very unlikely in 2014," he added, using moves in the U.S. Treasury yield curve as an indicator.