"There has been much talk about the strength of the US economy over recent months and while investors may be watching world economies with a degree of concern, the current market volatility is very different from the US downturn we saw in 2008/09.This time around, the economic problems are much better understood and policymakers can take considered steps to counteract the challenges faced. The other decisive difference, that makes a compelling argument for US equities, is the fact that companies' balance sheets are in much better shape compared to the situation we faced three years ago. Unlike last time, corporate credit stability is not a concern and we are not facing the drying up of liquidity that affected companies and markets so critically in 2008/09.
"Given this backdrop, US equity valuations are currently very interesting and recent fluctuations have provided great opportunities. Dividend paying stocks are the ones to watch and we have been picking up good valuations in areas such as the consumer discretionary sector, i.e. restaurant stocks. At the same we've been using the opportunity to increase holdings in financials stocks to benefit from attractive prices in what we call ‘misunderstood' assets in the sector.
"The message from us is clear - the US equities market offers some very attractive options at the moment. Despite what we expect to be a continuing phase of volatility, we believe now is not the time to reduce your US equity exposure and a high dividend yield approach is a solid strategy to weather the current market environment."
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