The Big Picture: Investing in an uncertain world
Paul Jackson. Global Head of Asset Allocation Research and András Vig. Multi-Asset Strategist
Is this a buying opportunity or the half-way stage in a larger slump? The truth is we don’t know, so we have constructed a range of scenarios that see the S&P 500 anywhere between 1400 and 3000 in 12 months.
A probability-weighted approach, adjusted for the recent change in cross-asset correlations, leads to a bar-bell approach in our Model Asset Allocation that favours gold and cash among defensive assets and real estate and commodities among cyclicals. Corporate investment grade credit is favoured under all scenarios. Regionally, we now favour UK, Japanese and EM assets.
We believe that oil, sterling and real estate (REITS) are among assets that have priced in a lot of bad news.
All data as of 16 March 2020 unless stated otherwise.
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Important information
- Where individuals or the business have expressed opinions, they are based on current market conditions, they may differ from those of other investment professionals and are subject to change without notice. This document is for informational purposes only. Please do not redistribute this document. You may only reproduce, circulate and use this document (or any part of it) with the consent of Invesco. The information in this document has been prepared without taking into account any investor’s investment objectives, financial situation or particular needs. Before acting on the information the investor should consider its appropriateness having regard to their investment objectives, financial situation and needs.
