Powered by MOMENTUM MEDIA
subscribe to our newsletter sign up

Global firm gives tips for surviving market volatility

With geopolitical factors likely to trigger further spikes in volatility for the rest of 2016, one investment manager has outlined strategies for dealing with challenging markets.

Investment management firm State Street Global Advisors said, in a global market outlook, volatility is likely to remain a feature of markets as they contend with broader growth concerns, the capacity of central banks to stimulate economies and other geopolitical events including elections in the US and across Europe.

In the current environment, investors should be taking advantage of negative correlations.

“We generally see negative correlations between equities and bonds when interest rates are low,” the report said.

“This relationship has been consistent across the globe and across time. A negative correlation makes high-quality long bonds particularly effective at reducing equity risk, keeping this asset class attractive, despite low yields.”

The report also suggested boosting exposure to growth assets.

“With more capital to deploy, investors can seek return in traditional growth assets, like equities, high yield, real estate and private equity,” it said.

However, State Street Global Advisors said it was cautious on emerging market equities.

“We continue to monitor progress on structural reform in China and other countries, as well as government efforts to stabilise and stimulate growth in China.

“We see insufficient evidence to suggest that incremental growth in emerging markets is likely to be superior to that of developed ones.”

The report said earnings growth in this region appeared uneven and lacked momentum. 

Global firm gives tips for surviving market volatility
nestegg logo
subscribe to our newsletter sign up
FROM THE WEB
Recommended by Spike Native Network
MMMR - This article is about promoting Binding Financial Agreements above all else. I’m just not sure why lending needs to be the vehicle to create the.......
RobR - I am a broker and a former bank manager. As a banker we were told /trained /instructed to cross secure everything possible to "entangle" the client to.......
MT - Banks love to cross-collateralise and tie up clients. Brokers spend their time unwinding cross-collateralisation. A broker will always recommend.......
Anonymous - "as the $8,500 a year subsidy will not offset the minimal rental yield gained off rents set at 20 per cent below the market"

This amount is.......