A leading asset manager is warning that global investors will find the road ahead strewn with macroeconomic challenges that are not conducive to long-term growth.
But investment opportunities still abound, said Mr Larry Fink, chairman and chief executive of asset management giant BlackRock.
He said tackling these macro challenges will take more than just the interest-rate manipulation central banks globally are currently engaged in.
The real urgency is for governments worldwide to shift their focus away from monetary policy back to stimulating growth and job creation through fiscal stimulus.
Mr Fink was speaking last week in Hong Kong at his company's annual Asia Media Forum.
"From the macro perspective, central banks have been the stabilising force in the world, but we're in the eighth year of low interest rates," he said. "Now we can say clearly that the low - and, in Japan's case, negative - interest rates are harming the global economy."
Mr Fink has led BlackRock since it was founded in 1988 to become the world's largest asset manager with more than US$200 billion (S$276 billion) under management.
His comments came amid yet another bout of hand-wringing in the global market last week, when hints of a June hike in the latest Fed meeting minutes triggered selloffs.
The stabilising effects of looser monetary policy are unmistakable, but persistently low to negative interest rates "are harming the core of consumers" as savings lose value and more people worry about their future, he said.
"We need governments from Asia, Europe to the United States to do their job, to reorientate the global economy for its growth.
"This is going to require a heavy dose of fiscal policies directed at infrastructure that creates strong, stable jobs," he added.
Against that backdrop, equity investment still makes sense, but it has to be calibrated with a long-term view, he stressed.
Timing market volatility is not something an average investor can hope to do, he added.
That volatility has been evident in Singapore, where the benchmark Straits Times Index (STI) has gone through two rounds of sizeable corrections so far this year.
The STI is now holding the line at around 2,730 points, after paring some 7.8 per cent since late April. Last week the market benchmark gained 1.06 per cent, but a still bearish mood was reflected by the tepid debut of Manulife US Real Estate Investment Trust on Friday.
Market watchers are expecting the index to remain range-bound, with a string of upcoming Asian economic data likely painting a mixed outlook that requires caution.
Singapore will disclose its April inflation figures today. It wil then release the final first-quarter growth figures on Wednesday, and the industrial production performance on Thursday.
"We expect first-quarter growth of 2 per cent year-on-year, versus our initial 1.8 per cent estimate…," Standard Chartered regional economist Jeff Ng said.
"Even so we see downside risks to growth ahead. We expected growth to slow to 1.7 per cent in 2016 from 2 per cent in 2015, weighed down by a still weak external environment."
He added: "We expect IP growth to remain muted for the time being, as domestic and external demand conditions remain weak."
