Confidence among investors and chief executive officers remains low amid the prospect of a slow, elongated recovery, Larry Fink said Wednesday.
The chairman and CEO of BlackRock, which manages over $3 trillion in assets, told CNBC that he's disappointed with how slow the recovery has been, noting little momentum in the markets. He does not expect to see the housing market or employment pick up any time soon.
“It is a modest recovery that will continue to be modest,” he said, adding that it will likely be two years before the economy begins to turn around.
Fink says all of this uncertainly has prompted CEOs to remain cautious. With over $2 trillion in cash sitting on their companies’ balance sheets, “CEOs are saying ‘We are confused, we are frightened, we don’t know where to turn,’” Fink said.
A lack of confidence among investors may also be to blame for low trading volumes.
“Volume is a statement of fear and confusion,” he said, calling investors’ lack of confidence “the biggest dilemma we have in our economy today.”
However, Fink sees opportunities for investors who place their cash in large-cap, dividend-paying equities and warns against holding debt. Looking at a five-year time horizon, he forecasts a large payday for those who invest in large-cap stocks. “It’s an opportunity we haven’t seen in our lifetime,” he said.