Elevated levels of volatility and uncertainty in the financial markets have caused investors to panic, George Gatch, CEO of the global funds management business of J.P. Morgan Asset Management, told the Morningstar investment conference Thursday.
“Investing should not be gambling,” Mr. Gatch, the keynote speaker at the conference, told about 500 attendees. Mr. Gatch said that between 2006 and mid-March of 2012, unprecedented volatility in markets has spurred inflows of $1.1 trillion into fixed income. Equities and ETFs, on the other hand, have only had $221 billion in inflows during the same period.
He said the result is that investors' portfolios are unbalanced, and told his audience that investors need to diversify back into equities and alternatives.
But Mr. Gatch said he saw no signs of volatility subsiding anytime soon. He cited a number of destabilizing crises over the past decade that caused the volatility, from the Sept. 11 attacks to the eurozone problems as well as two Middle East wars, the technology bubble and even Hurricane Katrina.
“Quentin Tarantino couldn't have written a more disturbing script,” he said.