Investors have to pay more attention than they ever have to political wrangling, and that’s made the market more difficult to navigate, BlackRockCEO Larry Fink told CNBC.
With the presidential election looming, upheaval in Europe and the dangers of thefiscal cliff, market participants are subject to the continual whims of political discourse, Fink said in a “Squawk Box” interview.
“That’s one of the main changes in the investing world against let’s say five or 10 years ago. Politics is playing a much more substantial role in the direction of the marketplaces,” he said. “I think we have such important issues to address politically, and they’re having such an impact on the markets.”
As a result, investors who normally would have a much longer time frame are focused to think in shorter increments, he said.
Fink, whose firm manages more than $3 trillion in assets, pointed out thatpolitical wrangling is even making its way into boardrooms, where company CEOs are serving shorter terms than the historical norm.
“We’re compacting all this time frame and we’re not seeing what I could call leadership and guidance and stewardship in terms of focusing on how to build a better future,” he said. “If you go back 20, 30, 50 years ago you had many more circumstances where people focused on more long-term issues and we’re not seeing that today.”
One of the main problems he identified is the rapid-fire news cycle and the proliferation of market opinions that has come with the expansion of the Internet.
“Everybody has their own bullhorn,” he said. “Everybody can have a mouthpiece, whether it’s a blog — sometimes blogs become viral and they change the course of the conversation for the day.”