Doll: Expansion Likely Has Years Left

Nuveen’s Bob Doll says this bull market and economic recovery has been the least believed of his career. But he says that has made for an excellent investment environment — and he doesn’t think we’re done.

Doll tells WealthTrack that the “Goldilocks” economy we’ve seen over the past several years — that is, one that is not too strong, and not too weak – is one that he likes to see as an investor. A stronger economy means more inflation, which means that the Federal Reserves would clamp down more on interest rates to put the brakes on the expansion. That has yet to happen, and stocks have kept rising. Doll says he thinks consumer spending will pick up in the second half of this year, thanks to employment and wage growth and the continuing benefit of lower gas prices. He thinks the economic recovery could set a record for longevity, and has a number of years left because the excesses that often derail bull markets and expansions are not present. That means it’s not too late to get into the market if you’ve been waiting on the sidelines. Doll expects equities to return about 6% to 8% annually over the next decade.

Doll also talks about his investment process, which involves a combination of fundamental analysis and quantitative models — and a lot of discipline. He says growing dividends, low payout ratios, and strong free cash flows are among the qualities he looks for in a stock.