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Saturday, 6 April 2013

'I'm Guilty Too' Says Mobius of Common Investor Pitfall


Procrastinators, take heart, you are not alone. Even the pros, don't react as quickly as they could.
"Inertia—you don't get around to it" is a big reason why investors are holding bonds and cash instead of stocks, Mark Mobius, executive chairman of Templeton Emerging Markets Group, told CNBC's "Squawk Box" on Friday.

Recently looking at his own portfolio—which he said he never has time for because he's managing other people's money—Mobius revealed, "I've got something like one third in cash. What am I doing?"

Like many investors, he asked himself that question and concluded, "'Hey, it's time to get into equities.' This is the inertia you see and I think that is going to change." In fact, he said, "I called my banker and said 'do more in equities' because it's crazy for me to be sitting on this cash."

(Read More: Stocks, Bonds Tell Two Stories; So Who's Right?)
What he experienced with his personal portfolio, Mobius said, is part of a larger trend of investors starting to "wake-up to the reality" that stocks are the only way for them to get real returns on their money.

"It takes time," he continued. "People don't move very fast. But once they move, then you're going to see tremendous bull markets. We're already seeing a very significant bull market [in the U.S.], but this is just the beginning as far as I'm concerned."

Stocks on Wall Street continue to hover around all-time highs with both the Dow Jones Industrial Average and the S&P 500 Index up double-digits in the first quarter alone.

(Read More: Are Stock-Shy Americans Risking Their Retirements?)

On global markets, Mobius said that the Bank of Japan's aggressive new stimulus measures are great for Japanese stocks "and markets all over the world, particularly Asia."

At this point, he said the Asian markets are not that concerned about the provocations coming out of North Korea. "The element of surprise is not there yet. So if anything is going to happen, it'll happen after the story dies and North Korea will do something." He did say the reaction of the United States to the threat is worth watching.

As for Europe, he called the situation in Cyprus "unbelievable" and damaging to the confidence across the Eurozone. But he said the "Euro will survive—will get over this—after many policy mistakes." He said he would stick with investing in the eastern European countries, which will be aided even more by the eventual rising tides across the continent.

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