• Log In Log Out
  • February 26, 2013

    The managers of T. Rowe Price's equity funds recently offered their outlooks in shareholder reports covering the 12 months ended December 31, 2012.

    As investors are becoming less risk averse and returning to equities, T. Rowe Price managers continue to find good long-term opportunities in companies with solid fundamentals.

    Jeffrey Rottinghaus
    Jeffrey Rottinghaus, U.S. Large-Cap Core Fund

    Earnings growth will likely slow from last year's pace, but it is still possible to identify companies with healthy revenue growth, excellent cash flow, rising dividend payments, and stellar balance sheets. We expect these companies to increase their capital expenditures in 2013, engage in stock buyback programs, and initiate other shareholder-friendly actions.

    Donald Peters

    Donald Easley
    Donald Peters and Donald Easley, Diversified Mid-Cap Growth Fund

    The bubble in fixed income and extreme risk aversion may be abating. We believe the current environment can potentially provide patient investors who are willing to take prudent risks with a great opportunity to invest in equities for long-term capital growth.

    Fiscal and monetary policy changes could present challenges to growth in the near term.

    Brian Rogers
    Brian Rogers, Equity Income Fund

    We will likely face many economic and investment challenges in the year ahead, as we do at the start of every year. Fiscal restraint in the form of tax reform, lower spending, or some combination of the two is bound to be a drag on the pace of economic and corporate earnings growth.

    Joseph Milano

    Another challenge we face is the eventual withdrawal of the massive monetary policy expansion we've seen over the past several years, especially in the U.S. This is not sustainable, and eventually the Federal Reserve will have to withdraw this stimulus, at least to some degree. So, in addition to the tightening fiscal policy, a change in monetary policy could pose additional headwinds to growth.

    Key elements in the global economic recovery include the revitalization of China's economy and a return to stability in Europe.

    Charles Shriver
    Charles Shriver, Balanced Fund

    While the risks in these regions appear less negatively skewed entering 2013, progress in China's transformation to a more consumption-based economy and Europe's ability to stay united on a path toward fiscal reform still pose potential challenges to our near-term global growth outlook.

    Anna Dopkin

    Numerous risks continue to weigh on the global growth outlook. Outside the U.S., we believe that the extent of China's slowdown and developments in Europe are the main risks for global growth.

    Improvement in the housing, energy, and manufacturing sectors may have a more significant long-term impact than policy actions.

    Thomas Huber
    Thomas Huber, Dividend Growth Fund

    Unemployment remains stubbornly high and is helping to keep a lid on a more robust recovery. Still, we are encouraged by the steady signs of improvement in the U.S. economy, particularly in the housing market.

    Brian Berghuis

    John Wakeman
    Brian Berghuis and John Wakeman, Mid-Cap Growth Fund

    We would note that most of the important drama has been taking place offstage, as is so often the case. The impressive turnaround in domestic energy production, the rise of industrial automation, and the related rebirth of American manufacturing will probably prove to be much more consequential stories over the long run, even if they receive relatively short shrift in the financial press.

    All funds are subject to market risk, including the potential loss of principal. Mid-cap company stocks generally are more volatile than stocks of large, well-established companies.

    Copyright 2014, T. Rowe Price Investment Services, Inc., Distributor. All rights reserved.