Investing in Uncertain Markets

While PIMCO believes the current growth cycle will continue, a fragile backdrop means investors should be prepared for future volatility. Learn more about PIMCO’s outlook for markets and how we think investors can position for higher macro uncertainty.

  • A backdrop of slowing global growth has meant that shocks to confidence from factors like global trade tensions or monetary policy news can have an outsized impact on markets.
  • Manufacturing globally had already been in recession even prior to the recent trade escalation.
  • Another factor that may weigh on market sentiment is the recognition of the likely diminished impact of central bank support.
  • While we still expect a baseline where growth continues in the near term, we have noted the rising probabilities of recession and an expectation for it over a secular horizon.
  • The very inverted U.S. yield curve likely reflects this same perspective. As the fundamental backdrop remains fragile, so too are markets where valuations remain elevated from a long-term perspective across asset classes.

Bottom line: We suggest investors focus on diversification and resiliency in a world where disruptions to both the economy and markets will likely underpin a bumpier ride ahead than what markets had faced for the better part of a decade since the last recession.

Read more of our analysis of market volatility >

Investing in Uncertain Markets

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