BlackRock CEO: Investors should be 100% in equities

Laurence Fink, chief executive officer and co-founder of BlackRock, said investors should have 100% of their investments in equities because of valuations and higher returns than bonds.

Investors who seek the safety of treasury bonds will have minimal returns and will not be able to meet their needs with the Fed expected to keep interest rates low, Fink told Bloomberg. In contrast, he highlighted the fact equities are trading at their lowest valuations in 20 or 30 years.

"I don't have a view that the world is going to fall apart, so you need to take on more risk," he said in an interview with Bloomberg Television in Hong Kong.

"You need to overcome all this noise. When you look at dividend returns on equities versus bond yields, to me it is a pretty easy decision to be heavily in equities."

Fink said in a May 31 interview he is more bullish on US equities than bonds because companies are benefiting from the weak dollar and have surplus cash to invest for growth.

The MSCI All-Country World Index rallied 5.8% last month and is currently  trading at 13.6 times earnings, less than half its valuation of 32.4 times at the end of 2009.

Fink said the Greek debt crisis will be resolved as it is not in anyone's interest to have a blowup now.

"I am very bullish on the market," he said, citing the increased liquidity from the US and European central banks. "I think the market is focusing too much on noise like Greece. And yet we are going to have a lot of volatility and we are going to have to live with it."

The European Central Bank would be able to provide liquidity to stabilize the European markets this year, while in the US Fink does not see another round of quantitative easing for at least a year.

"The only reason that I would think we would do a quantitative easing three is if the dollar gets too strong," he said. "I think the ECB is going to bring down the value of the euro. I think the euro will break $1.20 this year."

A weak euro will stimulate a recovery in parts of Europe, although this could jeopardise some of the US economic growth, he told Bloomberg.

The US did "particularly better than our estimates" because of the weakening of the dollar, driven in part by the quantitative easing, he added.