(Bloomberg News) BlackRock Inc.'s Laurence D. Fink said savers need to become more aggressive investors as returns on bank accounts and Treasuries shrink and people grow older.
The traditional mix of putting 60 percent of assets in stocks and 40 percent in bonds is inadequate in a "new world" characterized by an aging population, a reduction in borrowing and risk-taking by individuals and governments, and a greater role of emerging economies.
"I've personally said many times I would be 100 percent in equities," Fink, 59, said in a speech yesterday to the Council on Foreign Relations in New York. "Most investors need a more diversified portfolio, but virtually every investor has to find ways to achieve a better return than they'll get in cash or government bonds for the foreseeable future."
The comments by Fink, chief executive officer of the world's largest asset management firm with $3.5 trillion in assets, mark an effort by BlackRock to articulate an overarching view of markets and how retail and institutional investors should respond. Unlike Bill Gross's Pacific Investment Management Co., where investment decisions have been guided by the firm's "new normal" philosophy coined three years ago to describe a world of below average economic growth, each of BlackRock's units has the freedom to articulate its own investment outlook.
'Off The Sidelines'
"Our perspective of time is different from Wall Street firms," Fink said after the speech. Because asset managers have a longer-term perspective, they have a responsibility to be more vocal about what investors should do, Fink said.
Fink, who built New York-based BlackRock through a series of acquisitions including the 2009 purchase of Barclays Global Investors, has since been working on establishing a common brand for units ranging from exchange-traded funds to hedge funds.
"Whether it comes from an individual, a corporation or a pension fund, my answer is the same: you need to get off the sidelines and get your money working again," Fink said.
Fink, who urged investors to put all of their money in equities earlier this month, later told BlackRock employees in Beijing that the call was aimed at getting cash off the sidelines and back into the capital markets.
Investors near or at retirement without sufficient time to build up assets may have to continue working, Fink said after the speech.
'New Normal'