Potential recession leaves investors needing to shift focus
The global economy has shown some recovery, but there still is evidence of a looming recession and investors should be wary.
Kerry Craig, global market strategist for JP Morgan Asset Management, said investors should focus on income during this point of the economic cycle.
“We know we’re moving from that summer to autumn period here, it’s the same as we’re seeing a cooling in the weather and a cooling in the economy.”
“The yield that inverted was three months, typically when the yield curve inverts it’s a signal of recession and it inverts everywhere, not just in one part.”
“It is a pretty good predictor of a recession, we have seven cases where it has led to a recession with an average of fourteen months.”
Craig said this is a strong predictor, as there had been seven cases where it has led to a recession, with an average of fourteen months.
“If you did believe that yield curve inversion was going to set-off a recession, you’ve got about a year to start thinking about your portfolio and changing it,” Craig said.
“But it’s not always right, there have been two false signals.”
AUTHOR
Chris Dastoor
Recommended for you
The struggle to recruit specialist expertise in alternative asset classes means senior analyst salaries are surpassing $200,000 as fund managers compete for talent, observes Kaizen Recruitment.
TWC Investment Management, which launched in September, has unveiled a long-only equity fund targeting global wealth creator stocks.
As thematic ETFs gain popularity among advisers, research houses have told Money Management of their unique challenge to rate these niche products and assess their long-term viability.
Magellan Financial Group’s chief financial officer and chief operating officer Kirsten Morton is set to depart from the asset manager after more than a decade.
