DEUTSCHE BANK: History Says Stocks Are Currently Poised For A Period Of Strong Returns

SAM RO

SEP. 13, 2014

Bloomberg TV

Binky Chadha

Deutsche Bank Chief Global Strategist Binky Chadha joins peers Adam Parker at Morgan Stanleyand Jonathan Golub at RBC Capital Markets who believe the 5-year old bull market in stocks has a couple more years left in it.

In a new 92-slide presentation, Chadha lays out his asset allocation recommendations, which include being overweight U.S. equities thanks to dependable growth.

Chadha included a chart of rolling 10-year returns, which we see every once in a while.

“History suggests equities are poised for a period of strong performance after the 10 year return bounced in March 2009 from its Great Depression lows,” Chadha wrote.

Charles Schwab’s Liz Ann Sonders wrote about this chart last October.

“Investors don’t spend a lot of time hanging around the mean line, but instead the market tends to trend in one direction for multi decades (well-overshooting the mean) before heading back down to well-undershoot the mean,” Sonders said. “Being less than five years into the upcycle, history suggests we have more room to run.”

Sonders said that a year ago, which implies another four years are left before the upcycle turns.

Chadha’s report comes a week after a report from David Bianco, Deutsche Bank’s Chief US Equity Strategist, who recently flipped bullish.

Deutsche Bank