Crosscurrents bound to create bouts of volatility but also generate
investment opportunities across markets
ATLANTA, June 12, 2014 /CNW/ - Investors should not see today's broad
stock market as a bubble but rather as a mature bull market, says David
L. Donabedian, CFA, Chief Investment Officer of Atlantic Trust, the
U.S. private wealth management division of CIBC (NYSE: CM) (TSX: CM).
"By virtue of its duration and current valuations, equities are in the
mature phase of a bull market. That means a more sober pace of advance,
with a lot riding on the economy and monetary policy," says Donabedian.
"Many have asked the question, 'Are we in another bubble?'" he says.
"Our response is no, but given the destruction over the last 15 years
from the bursting of the tech, credit and housing bubbles, this
question is always a wise one to ask."
Stoked by unconventional monetary stimulus and with evident pockets of
valuation excess, the S&P 500 reached progressive new highs. But,
overall market valuations are middling relative to the long-term
average, and interest rates remain well below average.
"Excessive valuations and 'hot' IPOs in the social media and biotech
spaces have been deflated, while the overall market advanced. This is
an indication of rational, valuation-sensitive behavior—not a bubble,"
The good news is the U.S. economy continues to gain strength. "It has
been a long time coming, but the U.S. economy is showing its broadest
base of health in almost a decade," says Donabedian. "We look for 3% or
better real GDP growth over the next few quarters—about a full
percentage point higher than the average growth rate of this recovery."
There is no question that the extraordinary measures of the Fed and
other central banks have been a huge catalyst for the equity bull
market in recent years, he says.
In the near term, the European Central Bank's more aggressive approach
is supportive of equity markets around the world, not just in Europe.
"Liquidity is increasingly a global phenomenon," he adds. "Over time,
though, we expect that central bank policy will be the most frequent
source of market volatility."
About Atlantic Trust
Atlantic Trust is one of the nation's leading private wealth management
firms, offering integrated wealth management for high-net-worth
individuals, families, foundations and endowments. The firm considers
clients' financial, trust, estate planning and philanthropic needs in
developing customized asset allocation and investment management
strategies. Experienced professionals deliver a broad range of
solutions, including proprietary investment offerings and a robust open
architecture platform of traditional and alternative managers. Atlantic
Trust operates in 12 full-service locations throughout the U.S. with
$24.4 billion in assets under management (as of April 30, 2014). For
more information, visit www.atlantictrust.com.
CIBC is a leading Canadian-based global financial institution. Through
our Retail and Business Banking, Wealth Management and Wholesale
Banking businesses, CIBC provides a full range of financial products to
individual, small business, commercial, corporate and institutional
clients in Canada and around the world. CIBC owns a 41-percent equity
interest in American Century Investments®, a major U.S. asset
management company, serving financial intermediaries, institutions and
individuals, and acquired Atlantic Trust, a premier U.S. private wealth
management firm, in January 2014. You can find other news releases and
information about CIBC in our Media Centre on our corporate website at www.cibc.com.
SOURCE: Atlantic Trust Private Wealth Management
For further information:
Media inquiries: Caroline Van Hasselt, Director, CIBC External Communications and Media Relations, (416) 784-6699, email@example.com or Carolyn Donnelly, Atlantic Trust Director of Marketing, (404) 881-3417, firstname.lastname@example.org.