But BlackRock said this would bring notable opportunities for global investors.“Economies outside the US continue to struggle, and emerging markets are likely to remain under pressure, although some adjustment has already occurred in anticipation of rate normalisation,” it said.“Equities may also find it difficult to advance in the face of an appreciating dollar and stagnant corporate earnings, placing greater importance on investment selectivity.“We prefer stocks, particularly European and Japanese equities, over bonds, and market-neutral strategies such as long/short equity and credit.”Deutsche Asset & Wealth Management said its outlook for 2016 was unchanged.Its CIO Stefan Kreuzkamp said: “We remain constructive on developed market equities, with a slight preference for Europe and Japan over the US. Sector-wise, technology, consumer cyclicals and financials remain in focus. The latter sector has historically outperformed as central bank interest rates start rising.”He added: “We acknowledge the market risks associated with the Fed hike – for example, fund flows out of higher-risk asset classes such as US or emerging market high-yield bonds.“We would, however, view pronounced equity market weaknesses in the aftermath of the Fed hike as a tactical buying opportunity.”The rate rise signals the divergence in monetary programmes between the Federal Reserve and the European Central Bank (ECB), according to James Rutherford, CIO at Hermes Sourcecap.“Furthermore,” he added, “there are signs disinflation across the euro-zone may soon pick up. As a result, we expect the ECB to further reduce its deposit rate this December in an attempt to kick-start bank lending.”He said this would be good for investors.“European equities could outperform US equities as excess liquidity struggles to find a home in the real economy and is parked in asset markets instead,” he said.“With global growth slowing, earnings expectations being reined back and an increasingly divergent stance in monetary policy between the US and Europe, we expect 2016 to be a year in which the euro-zone markets, awash with excess liquidity, reward those companies that produce an increasingly scarce commodity – consistent earnings growth.”Turning to fixed income markets, David Lloyd, head of institutional public debt portfolio management at M&G Investments, said: “It seems likely low rates will have caused some investors to take extra – and, perhaps, unfamiliar – risks in pursuit of yield.“Similarly, some players may have taken advantage of minimal rates to increase borrowing (leverage). It will take some time before we will be in a position to assess the effect of higher rates on such decisions.”Ian Kernohan, an economist at Royal London Asset Management, said: “While we agree the Fed will stick to a gradual path initially, the market can often underestimate the pace of tightening in a rate cycle.“If the labour market data remains robust through the rest of the winter, combined with a further rise in headline inflation, the market may have to revisit its benign view about the likely path of US interest rates.”In that case, he said: “Bond markets would be most vulnerable to such a reappraisal – in particular government bonds, which have enjoyed a multi-decade bull run of falling yields.”Meanwhile, Ken Taubes, head of US investments at Pioneer, said: “Our overall outlook for fixed income markets is fundamentally unchanged. We have seen corporate credit spreads widen despite the fact US economic activity is recovering, and we are seeing some recovery in Europe as well.“So wider credit spreads may represent a good opportunity.” While the US Federal Reserve’s decision to raise interest rates by 0.25 percentage points – the first increase in nearly a decade – was widely expected, market players have warned that what matters most now is the path of future rate increases.“The increase in borrowing costs may feel like a seismic change, but that’s primarily because it’s been so long since rates have been increased,” said BlackRock strategists.“The Fed said it expects rates to stay subdued, and the hiking cycle to be gradual, which should allow markets to absorb the increases with relative ease.”Having raised rates to a range of 0.25% to 0.5%, the Federal Reserve signalled it was likely to make four further increases of 0.25% each during 2016.