The US firm gave a ringing endorsement of the case for staying invested in the current economic environment when it addressed a conference in Hong Kong.

Investors should not take their chips off the table despite recent geopolitical jitters and the hike to US interest rates by the Federal Reserve, according to Charles Schwab, the US-headquartered brokerage and investment services giant.  

"Although the fear of uncertainty reflects the potential threat posed by policy risks to future growth, economic and profit growth continue to improve in the near term and support stocks. Adding on to that, low chance of recession, improving growth, positive economic surprises, recovering earnings estimates and a return of investor buying are strong reasons why investors should stay invested," Jeffrey Kleintop, chief global investment strategist at the firm, told a press conference in Hong Kong yesterday. 

Global growth and inflation have picked up; nominal gross domestic product growth may exceed 5 per cent in 2017 for the first time in six years, helping the sales of global companies to grow for the first time since 2012. Kleintop said economic data across the world continued to exceed economists' estimates. 

"In response to improving global economic data, analysts have been raising their earnings per share expectations for global companies. While still below prior peaks, earnings estimates have been improving and helping to lift stocks. The return of inflation in 2017 may help to lift sales for global companies, bolstering business leaders' confidence and spending," he said.

Investors may expect the “populist” revolts that shook elections last year to continue, but that trend may not endure because issues that have fuelled hostility to the European Union, for example, have lost momentum, Kleintop said. 

On the US front, economic data have improved alongside the prospect of a business-friendly administration under Donald Trump, helping to bolster both stock prices and Treasury yields. Although bouts of volatility and market pullbacks should be expected, improving earnings growth and stronger US equity fund flows should keep the bull market alive in 2017, he said.

"We believe developed market international stocks may underperform US stocks over the next six to 12 months due to concerns about political risk in Europe and expectations of relatively stronger US growth accompanied by a firm dollar," he added.