Certified Financial Analysts (CFAs) are more optimistic and confident that both local and global economies may grow this year, according to the 2014 Global Market Sentiment Survey (pg 5). Sixty-three percent of CFA Institute members think the world economy may expand in 2014. That’s a big change from 2013 when only 40 percent were optimistic about global growth prospects (pg 8). Overall, the survey found CFAs think stock markets in the United States, China, Japan, and Germany may offer the best investment opportunities in 2014 (pg 11).
Optimism at the local level varies by region. The sharpest turnaround in perspective was among CFAs in Japan – just 11 percent thought their country could experience economic growth last year. This year, 73 percent are optimistic. There was a surge of positivity among CFAs in Europe, the Middle East, and Africa (EMEA), too. Fifty-six percent have positive expectations for local growth, up from 33 percent last year. In America, 62 percent of CFAs are optimistic about growth compared with 39 percent in 2013, and, in the Asia Pacific region, 69 percent expect to see things improve in 2014 as opposed to 32 percent the previous year (pgs 8-9).
Not everyone’s outlook is rosy, however. Chinese CFAs have guarded expectations – just 45 percent expect to see their local economies grow. In Hong Kong, Brazil, and India, CFAs are actually less optimistic than they were last year (pgs 8-9).
Survey participants in both emerging and developed markets said one of the biggest risks to local economic growth is political instability. Participants in the United States, India, South Africa, and Brazil – countries that are gearing up for general elections – shared the concern. Other risks that could affect economic growth included the end of quantitative easing and the possibility of a financial bubble developing in local markets (pg 14).
Since the report was written in late 2013, CFAs’ optimism may have been buffeted by the ups and downs of the year’s first quarter, but it could prove out over the longer term.
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