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Credit Suisse Backs Stocks in '19, But Says Boost U.S. Duration

American flags fly outside the New York Stock Exchange in New York.

American flags fly outside the New York Stock Exchange in New York.

Photographer: Jordan Sirek/Bloomberg

Investors would be smart to remain bullish on equities in 2019, but should start switching to longer-duration U.S. bonds, Credit Suisse Group AG said in its investment outlook.

“In a late-cycle phase, equities typically continue to outperform most asset classes,” Michael Strobaek, Credit Suisse’s global chief investment officer, and Nannette Hechler-Fayd’herbe, global head of investment strategy, said in a note. “Thus, equities should still be favored unless valuations become too stretched or a contraction takes shape. However, U.S. investors should begin to lengthen bond duration.”