When it comes to long-term predictions about the markets, analysts and investing professionals tend to be too optimistic, but investors are too pessimistic.
So argued David Kelly
, chief global strategist at J.P. Morgan Asset Management
] and chief market strategist for J.P. Morgan Funds, in a press lunch today at J.P. Morgan's offices in midtown Manhattan.
"There is no doubt that people are more pessimistic than the economic numbers suggest they should be," Kelly says. "There's a certain post-traumatic stress disorder among the investment community. There's also a lack of understanding ... about basic economic and financial literacy."
"In the absence of knowledge, fear takes over," Kelly adds. "People don't want risk. Risk is the four-letter word of the teens."
The lunch also featured three of Kelly's colleagues: John Bilton
, global head of multi-asset strategy; Jed Laskowitz
, co-head of global investment management solutions; and Tony Werley
, chief investment officer and chief portfolio strategist for endowments and foundations. The quartet presented JPMAM's long-term capital markets outlook for 2017, which will be officially released tomorrow. The 2017 outlook, which runs to nearly 100 pages, is the 21st annual edition published by the JPMAM team.
"Right now people are very focused on the election," Kelly says. "But there is life after the election, and people have to think about long-term investing."
On a personal note, if you're looking for Kelly this coming weekend, you'll find him running the New York City Marathon, his first marathon. (His son is running the marathon, too.)
Kelly and his colleagues offered a host of recommendations. Kelly boiled them down to one three-part mantra.
"People do need to be more active, more diversified, and more inventive," Kelly says.
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