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Cumberland's David Kotok Sees Very Slow Growth in U.S. Markets

Cumberland Advisors CIO David Kotok said U.S. growth could bump down below the 2% pace that has prevailed since the Great Recession ended in 2009
By Dan Weil - Tue, Jan 29, 2020

David Kotok, chief investment officer at Cumberland Advisors, isn’t particularly bullish about U.S. financial markets for this year.

As for bonds, “you’ll be lucky if you get the coupon this year,” he said in an interview with WealthManagement.com at the Inside ETFs conference in Hollywood, Fla. “Interest rates have rallied, and the outlook for economic growth has diminished.”

That has pushed investors into high-grade U.S. bonds, he said. But interest rates have already fallen to historic lows. “It’s hard to see interest rates going much lower.”

Kotok anticipates “very slow growth” in the U.S. this year, perhaps below the 2% pace that has prevailed since the Great Recession ended in 2009.

Inflation could gradually increase, assuming there’s no major shock from the coronavirus, he said. “Part of me is very concerned about the virus,” said Kotok, who wore a medical mask as he spoke.

When it comes to stocks, with interest rates so low, they aren’t “responding to traditional valuations,” he said. In other words, investors are ignoring the fact that many valuation measures for stocks, such as price to earnings, are at historical highs.

“There’s cash around, and money is going into the stock market,” Kotok said. “It’s making old people like me disconcerted.”

Full story: https://www.wealthmanagement.com/fixed-income/cumberlands-david-kotok-sees-very-slow-growth-us-markets