Investors should tilt toward equities in their portfolios because they are not getting paid enough to hold bonds, said Wayne Lin, Portfolio Manager at QS Investors. Lin added that quantitative easing by the ECB and Bank of Japan is increasing liquidity in the system which will likely end up in stocks. He said earnings for U.S. companies will be strong as well, which is another good case to overweight stocks versus bonds in an asset allocation. Finally, Lin made the case for high yield bonds, saying energy prices are stabilizing and high yield performs well in a robust economy.
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