Investors should be positioned positively in equities, according to Goldman Sachs' Jim O'Neill, who says we have entered a 'global bull market'.
'On the back of the credit crunch, we've entered a new bull market in global equities - led by different places, different constituents and different drivers', the chairman of Goldman Sachs Asset Management said, alluding to the increasing importance of the world's emerging markets.
Speaking on the 'the world and its challenges', O'Neill pointed to the importance of the quartet of Brics - a term he coined - stating that the combined GDP of these countries would be as big as the US sometime in the coming decade.
Though he was upbeat on the prospects for the US at his talk to the CFA Society in London, he stressed that just because the US faces 'several challenges' this does not mean the world cannot survive. O'Neill added that the US fiscal position is similar to Portugal, the peripheral eurozone economy that is in the sights of bond investors for an Irish-style bailout.
O'Neill singled out two European economies - the UK and Germany. He said that he was 'relatively optimistic' about the UK economy, adding that the Office for Budget Responsibility - which yesterday forecast GDP growth of 2.1% for 2011 - was 'still catching up with reality'. Next time, the OBR will probably have to revise up its forecasts again, O'Neill said.
The UK economy's cyclicality will continue to surprise people', O'Neill added.
Germany, O'Neill said, is 'not far off boom conditions'.
'One of the most important developments in recent months is that the German consumer has started suddenly to believe in the future', O'Neill said, a fact that the media had not picked up on.
Globally, O'Neill stressed that the biggest question going forward was how China controls its inflation.