The new year is off to a somewhat slow start, but there are plenty of investing opportunities to prevent the market from dawdling too long, Russell Investment Group analysts said during an "Outlook 2005" conference call today. "We're optimistic about equities vs. fixed income, more optimistic about growth than value, and think non-U.S. equities pose an attractive growth opportunity," Ernie Ankrim, chief investment strategist, said in an interview after the call.
Mark Eibel, head of U.S. equity research, said he is targeting earnings growth from 6% to 8% this year, with a low interest-rate environment and the falling U.S. dollar benefiting stocks. On the fixed-income side, Tim Allen, senior research analyst, said he is looking for "relatively modest returns" in a slightly increasing interest-rate environment.
Russell is "less optimistic" about REITs following the run-up in 2004, which put them at expensive levels, Mr. Ankrim said. Dave Brunette, senior research analyst for real estate, said he expects REIT earnings to grow between 5% and 7 % this year.
Non-U.S. equities should be aided by the weakening U.S. dollar. Within this area, Russell analysts said they expect favor to shift to growth stocks from value. "Growth has been a laggard and value a strong performer," Mr. Ankrim said. "Our non-U.S. managers expect that trend to stop some time this year."
