Dear Reader,

As a continuation of my posts, I will first express my views on the US Economy. I believe that this year the US economy will lose a bit of steam. I envisage year on year GDP growth of less than 2 percent.

Furthermore, I believe emerging market stocks are undervalued. They are trading at very low valuations. BRICs especially seem a good bet. One should be careful, however. The Federal Reserve tapering and subsequent raising of the Federal Funds Rate could hurt emerging market stocks. Escalation of the crises in Ukraine or hard landing in the real estate market in China could further depress prices. India and Brazil have outperformed recently, but further structural reforms are needed to sustain the rally.

A further word should be mentioned about the stock market in the USA. I know the valuations are not stretched(outside the (social) tech space) by historical standards, but the situation at least sentimentwise is quite different from that in 2007 when "the sky was the limit". A 10% percent correction is overdue. But this does not mean that prices will not continue higher for the time being...


Disclaimer: This article is provided solely for informational purposes, and does not constitute an offer or solicitation to buy or sell any securities. The opinions expressed in the blogpost are the author's and they in no way express the opinion or official position of Bulgarian National Bank!

Conflicts of interest: I may possess some of the securities mentioned in the blogpost!