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Equity markets in the U.S. have been down this road before. In both 2010 and 2011, the S&P 500 surged in the first few months of the year, only to hit its high in April and pullback 20 percent afterward. So far that story is repeating itself, with equity markets already down 9 percent from the year’s high reach in April.
But Keith Wirtz, chief investment officer at Fifth Third Asset Management, tells BNN that the storyline might not hold this time around.
“We are worried that maybe we’re going to go through another bear market condition, but we’re positioning portfolios with the idea that this may be a little more shallow…this year will be volatile period but not as close to a bear market as in previous years,” he says.
Wirtz says the macro fears -- namely the sovereign debt crisis in Europe and political gridlock in the U.S. -- may be losing their impact on investors.
“Those same themes are reappearing again, but we’re hearing about it for the third time and we think that maybe this marketplace isn’t as vulnerable to that pull back,” he says.
Wirtz believes the fundamentals of many companies remains “sound.”
“By the end of the year we are going to see a reacceleration in earnings and that’s going to lead to higher stock prices,” he says.