(Bloomberg) - Investors should use a 10% market correction to load up on stocks, according to Peter Oppenheimer, Goldman Sachs Group Inc.’s chief global equity strategist.
“I think fundamentally that’s probably a good time to be getting back in,” Oppenheimer said Tuesday in an interview with Bloomberg Television. “Fundamentally, we’re still in the relatively early stages of this economic cycle,” as rates remain low and profit growth is “reasonable” despite the pullback in emergency support, he said.
Stocks globally slumped on Monday on concern that the debt crisis at China Evergrande Group could have an impact on the broader financial system and as investors prepared for the Wednesday update from the Federal Reserve. Dip buyers were quick to bounce back on Tuesday, however, as many major investors see few alternatives to equities.
Some volatility and a modest pullback in stocks would be understandable as markets have already priced in a lot of good news, and returns may be “much lower” than they have been over the past year or so, Oppenheimer said.
While stocks are poised for their first drop in eight months, Goldman isn’t the only Wall Street broker urging investors to look for ways to get back into the market.
JPMorgan Chase & Co. Chief Global Markets Strategist Marko Kolanovic said Monday’s drop was an opportunity to buy stocks as the global economic recovery is poised to pick up momentum.
Meanwhile, HSBC Holdings Plc strategists led by Max Kettner said they remain overweight equities and see this as a “dip to buy” as markets price in an “excessively bearish” economic outlook.
BlackRock Investment Institute is also among those remaining pro-risk, with strategists tactically overweight on European stocks, with a neutral view on U.S. equities.
Farah Elbahrawy and Kailey Leinz
