Equities will outperform bonds in 2005

Says Fiduciary Trust''s CIO, Jeffrey Applegate.

Stocks will perform better relative to bonds next year, for a third straight year, says Jeffrey Applegate, New York-based CIO at Fiduciary Trust, during a swing through the region.

Two secular events define this business cycle, he says, US labour productivity and the globalization of the labour supply.

Although America's labour productivity is slowing down, it has been very good for the past decade, and steady 2-3% rises will continue throughout the remainder of this business cycle. This is positive for inflation, he says, because most inflation in developed countries is due to the cost of labour. With productivity gains, core inflation won't pose a threat, and...

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