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Stephanie Flanders tips Europe and EM equities in 2014

Stephanie Flanders has tipped European and emerging market equities as the markets in which investors should put their money in 2014.

JPMorgan Asset Management’s chief market strategist for UK and Europe, and former economics editor at the BBC, said 2014 will be the year when correlations between markets break down.

She said it was “show time” for fund managers after a number of years in which they “did not have to be the best stock picker to make money”.

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In that environment Ms Flanders said that if investors were “brave” and prepared for “bumps” along the way then “emerging markets look cheap”.

She also tipped European equities as another area where she will be putting her money in 2014.

But she recommended an “intelligent approach” to Europe that included not just the eurozone but also the countries not in the single currency such as the Nordic countries, where she said there were a number of good opportunities.

However, she cautioned that investors should keep an eye on company earnings figures because she said she was “more worried about whether we get a return to earnings growth next year than external forces” for the eurozone next year.

Overall, Ms Flanders said she was positive on the outlook for both global growth and markets in 2014 and said she expects growth through the year to be even better than expected.

She said the global economy was changing in a positive way with most economies not appearing to be in “recovery mode” looking at more positive growth in the future.