"We think that will drive still much better returns inequities than fixed income, either government bonds or credit, moving forward," he said.
In a note to clients discussing the bullish call, Goldman said equities had now entered a "growth" phase - the longer but more moderate stage of the bull market when equities are driven more by earnings growth rather than valuations.
"Over the next three or four years, there's the prospect for earnings to grow quite strongly. And you've got high dividend yields to start with," Oppenheimer said.
European stocks were more attractive than U.S. stocks. The U.S. looks fundamentally strong, Goldman said, but valuations were above average and all the good news was already priced in.
"Expectations are more depressed in Europe so there is a valuation gap to be caught up," Oppenheimer said.
The brokerage is also careful about wading into the battered emerging markets.
"Over the medium term, we prefer developed markets to emerging markets because some of the big supports in emerging markets over the last decade - very cheap labor costs, falling real interest rates, booming commodity prices- are moving in the opposite direction," Oppenheimer said.
Source: Handelonthelaw.com Staff Writer
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