Larry Fink Says it’s an Easy Decision to be 100% in Equities

By on February 9, 2012

Larry Fink - BlackrockLarry Fink, CEO and Chairman of Blackrock, was interviewed by Susan Li on Bloomberg this week. Fink commented on the European situation and was optimistic that the Greek indebtedness issue would be worked out.

Fink said he was bullish on the market and there was too much focus being placed on noise including Greece. He added we would have a lot of volatility and have to live with it.

Fink said Mario Draghi has done pretty much what Ben Bernanke has done which is provide a lot of liquidity and the ECB will provide another round of liquidity. He also expected the ECB to ease interest rates 2-3 more times, steepening the yield curve, and helping bank profitability; resulting in a stabilization of Europe for the year. He added this wouldn’t result in a panacea, but would stabilize the markets.

On China, Fink says there will be a change in leadership and the economy will be a little better than expected. Instead of 7 percent GDP by the end of the year, Fink expects it to be closer to 9 percent.

The interview continued with a discussion of other European stimulus options, long-term trends and confluences leading to weak job growth, his reasoning for recommending 100% equity exposure (an easy decision), his view on bonds in that they don’t provide much yield, changes in leadership adding to risk, and the divergence in prosperity and associated cross-currents.

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