JPMorgan's wealth management arm says these 5 strategies can help investors navigate a recession
The US is facing a looming recession spawned by the Federal Reserve's war on inflation - and there are five ways investors can navigate the approaching turbulence, according to JPMorgan Private Bank.
While that doesn't mean it's going to be smooth sailing for the rest of the year, investors should consider using market volatility to rebuild their portfolios, it added."In short, you can now build the equity portfolio you want to carry into and through the next bull market," it said, adding that semiconductor and homebuilder stocks offer potential buying opportunities. Reducing"home bias" is also helpful in navigating a recession, according to JPMorgan Private Bank.
On China, the bank said it expects a"durable recovery" following years of COVID-19 lockdowns."Of course, investing in China comes with greater risk than investing in many developed markets. But we think certain investors could reap a higher reward for taking that risk in the second half of the year," it said. "A longstanding issue for many of our clients, as we have discussed over the years, is holding a concentrated position in a single stock or security.
"Over the Fed's last seven hiking cycles, core fixed income has outperformed cash by an average 14% cumulatively in the two years following the final interest rate increase, and has never underperformed. Finally, bonds once again are providing a stable source of income and the potential for portfolio protection in an economic downturn," the wealth management firm said.
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