BlackRock Chairman and CEO Laurence D. Fink said stocks might decline as much as 15% because of political risks in China, Japan, France and the U.S., while he remains bullish in the long term.
If global gross domestic product expands by about 4%, stocks worldwide could return more than 7%, Mr. Fink said Tuesday at a conference in New York. Ray Dalio, founder of Bridgewater Associates, said at the conference earlier Tuesday that equity returns will slow to 4% annually in the next decade.
Mr. Fink, whose firm runs $4.1 trillion for clients, said last year he would invest all of his personal wealth in equities. He's tempered that optimism this year following political stalemates, saying in January he had lowered his expectations for the stock market in the first quarter after being disappointed by the bill U.S. lawmakers passed to avert spending cuts and tax increases. Last month, he said the U.S. could have a lower equity market following the political debate on the debt ceiling.
On Tuesday, Mr. Fink said if investors are already invested 100% in equities, they should keep their money there. He has said in the past he's bullish on the U.S. over the longer term, citing a strong banking system, an improving housing market and the nation's large supply of natural gas.
The Federal Reserve won't be able to raise interest rates for a number of years as the economy hasn't strengthened sufficiently, Mr. Dalio said Tuesday. He didn't elaborate on his forecast for equities.
U.S. stocks have gained about 25% annually, including dividends, since reaching a 2009 low as the Fed inflated asset prices with a series of unprecedented bond purchases.