Investors can still make hay while central banks stick to their easy monetary policies, the deputy chief investment officer at investment firm Pimco has told CNBC.
Virginie Maisonneuve told CNBC Tuesday that the idea wasn't to be defensive but to hold the right portfolio structure over the longer term. This, she said, would negate the need for any undue short-term trading and would mean investors could take advantage of geopolitical risks, which she said created occasional "air pockets" of opportunity in global asset markets.
"You have a world that is healing but it's not growing very strongly. So in that environment, with high debt and low real rates, I think you will see risky assets going higher," she said.
"All that being said, you want to be very careful in the way you are positioned and that's why I think this mosaic approach of style is really important in order to get sustainable returns and the ability to take on air pockets."
The "mosaic" style put forward by Maisonneuve means having assets that pay a decent dividend, she explained, which includes a focus on high-quality stocks. She also said investors should be exposed to any growth in the global economy because she believes that this would be priced at a premium. Lastly, she said that a portfolio would also need a long-short strategy - which involves taking long positions in stocks that are expected to increase in value and short those expected to decrease - in order to take advantage of these so-called "air pockets".
The management company - best known for its range of fixed-income funds – traditionally pushes the idea that central banks in advanced economies will remain accommodative over the longer term and present a Goldilocks-style "not-too-hot, not-too-cold" strategy that would keep asset markets on an even keel.
Pimco believes the world's central bankers will aim toward zero percent interest rates when allowing for the effects of inflation. This compares with the current negative real rates and is in direct contrast with "normal" real rates of around 2 percent which were common in decades past.
Pimco, which has nearly $2 trillion in assets under management, has dubbed its outlook the "new neutral," and it's one of the reasons its funds are betting on five-year U.S. Treasurys.
"What we went through in the global financial crisis was so intense, has been so intense, that central bankers will take a little bit more time than they usually do to tighten," Maisonneuve said. "It's going to be lower for longer in the fear that if we tighten too early we might be a very difficult place again."
Meanwhile, Goldman Sachs remains one of the most bullish investment banks on Wall Street despite predicting a more modest environment for equities in the medium-term. Analyst David Kostin said in a note released Monday morning that U.S. stocks would climb further but explained that the trajectory would be shallow with the U.S. Federal Reserve looking to tighten policy in the not-too-distant future.
Kerry Craig, a global market strategist, at JPMorgan Asset Management told CNBC Tuesday that portfolio strategies should now be focused on finding quality companies or quality bonds that have decent fundamentals in place.
"There's so much liquidity out there...there's so much money just chasing a decent return," he said.