Mary Chris Gay: Why we see 15% upside for US equities

Mary Chris Gay, co-manager of the £52m Legg Mason US Equity fund with Bill Miller, forecasts a rally of up to 15% in US equities by the end of 2012.

She is confident the US will prove the strongest of the developed markets in 2012, barring an extreme extraneous shock. Already, US equities have made their strongest start to a year for a quarter of a century, according to Bloomberg data. "From a market standpoint, we would not be surprised by a 10%-15% up-year for US equities and given that we are already up 4% that implies some volatility," Gay said. "A lot of the data has come out much better than expected, reflecting the high level of pessimism. But what underpins our outlook is valuations which are at low levels, especially f...