Nevertheless, investor sentiment has taken a hit and will likely remain negative until we see better economic data from both the U.S. and China, as well as a stabilization in oil prices. We expect these developments will occur over the coming months, but the timing is unclear. When it does become more evident that the economy remains on track, that should pave the way for improved performance from risk assets. We believe equities will outperform bonds over the next six to twelve months. But we also acknowledge that volatility should remain high, and there may additional downward pressure on stock prices in the near term.
Bob Doll is senior portfolio manager and chief equity strategist at Nuveen Asset Management.