Survival in the chaotic market Investment experts offer countermeasures

Survive the chaotic market. Investment experts offer countermeasures. The stock market has plummeted, and the risk of the United States falling into another recession has greatly increased. Investors must adjust their investment portfolios accordingly. People should…

Investment experts offer countermeasures to survive in a chaotic market. The stock market has plummeted, and the risk of the United States falling into another economic recession has greatly increased. Investors must adjust their investment portfolios accordingly. People should reassess the types of domestic and foreign equities they own, their views on emerging markets, cash and U.S. Treasuries, and even their reasons for owning gold, so that their investments can weather an economic environment of slower or even zero growth. CNN and Money magazine reported that the following are four investment tips for staying profitable amid market turmoil: 1. Review your holdings. Investors are now embracing traditional "recession-resistant", dividend-rich stocks, such as utilities, health care and consumer staples stocks. Within these groups, look for companies with above-average dividend yields, cash-rich companies that sell goods and services that people need but are not affected by economic downturns. In the best cases, healthy companies can benefit from weakening rivals and expand market share, and emerge from the economic downturn stronger. Economist Rosenberg said that more sophisticated investors will reduce their holdings of riskier assets, such as small-cap growth stocks. 2. Pay attention to China and emerging markets. If the United States falls into recession, stock investors can expect to see emerging markets pull back further. Emerging market expert Haley said: "The connection between emerging markets and the United States is very close. The United States is still the world's largest market and the largest consumer of emerging countries." Haley pointed out that if the United States declines again and China's growth cools down, it will harm investment interest in commodities, and Brazil will be particularly hard-hit. China has replaced the United States as Brazil's largest trading partner and is also one of the largest buyers of oil, natural gas, coal and minerals. "Trading partners with close ties to the United States will be hurt the most," said Rusev, director of Frontier Strategy Group. 3. Embrace U.S. Treasuries and Corporate Bonds According to analysts and bond managers, U.S. Treasuries have attracted risk-averse investors and remain the preferred safe haven for investors. Riskier high-yield or junk bonds may see price declines as they did during previous recessions. At the same time, investment-grade bonds issued by companies with sound fundamentals and high investment ratings will follow the rise in public bonds. Swanson, chief investment strategist at MFS Investment Management, said: "If you choose to buy bonds, you have to buy U.S. Treasuries because they have performed very well in recessions in the past." Financial expert Reiholtz pointed out that it doesn't hurt to hold a little cash. "In a secular bear market, the investor's job is to manage risk and preserve capital," he said. He suggested that a 50% portfolio allocation be split evenly between cash and bonds, with the remainder allocated to stocks and commodities. 4. Invest in gold. Gold has become a safe haven for funds during at least two recent waves of U.S. economic recession. The period from December 2007 to June 2009 was the longest recession period since World War II. During this period, gold futures surged by 18%, while the Dow Jones Industrial Average fell by 37%. During the recession from March to November 2001, gold prices rose 3.3% while the Dow Jones fell 5.7%. Portfolio manager Cordier said: "We are on the verge of a second recession, and gold is still the target to buy when people are panicking." He said that the recession will cause Europe and the United States to continue to maintain interest rates close to zero, leading to currency depreciation. Gold, which is regarded as the "ultimate store of value," will still perform well in a recessionary environment.