Mobius Sees Continued Volatility, But Good Returns

Templeton Asset Management’s Mark Mobius sees more volatility for global markets in 2012, but expects stocks to fare well over the longer term.

“Taking a five year view, we expect all markets to do well,” Mobius writes in The Economic Times. “The key is to find undervalued companies that are well capitalized, and have a unique and competitive product range. Companies that are paying solid and sustainable dividends are especially attractive. The next few years are critical for the global economy as countries work through the imbalances and lay the groundwork for the next growth phase.”

Mobius says emerging markets will continue to be the driver of global growth, in large part because of their growth in domestic consumption, with commodities also being a “key focus area”.

As for issues that concern him, Mobius says volatility “will remain and probably increase as the growth of derivatives continues, as high frequency trading expands and as markets become more internationalized.” And, he says countries around the globe are facing inflation concerns. He seems optimistic on the European debt crisis, writing, “We believe that these countries will continue to create practical solutions that will address near term issues as well as let them pursue fiscal consolidation over the medium term.”