In CIO Weekly Outlook, Erik L. Knutzen, CFA, CAIA, Chief Investment Officer—Multi-Asset Class Advises Cautious Approach on Equities as Cash and Short-Term Bonds Can Pay Off
The roof of the US debt and banking tensions are just two of the many obstacles that risk causing the markets to slide. But for investors, the opportunity cost of maintaining a cautious and prudent approach is minimal. Neuberger Berman in the IOC Weekly Outlook signed by Erik L. Knutzen, CFA, CAIA, Chief Investment Officer—Multi-Asset Class with the headline “Fall Hazards,” recalls warning since February not to overlook the issue of the federal debt ceiling, an issue now just as important as the inflation outlook and interest rates. In recent weeks, in fact, it has become one of the main fears, even if it represents only one of many potentials “fall hazards” of the moment.
VOLATILITY AT A MINIMUM BUT BETTER A CAREFUL APPROACH
Despite the media headlines, these concerns don’t seem to be reflected in the stock markets, close to the highs of the year while the volatility index is close to lows. According to Neuberger expert Berman, when risks accumulate but markets seem to ignore them, it is advisable to adopt a cautious approach towards riskier asset classes, especially in the event that high yields on cash and bonds in the short term, they may pay off investors’ “patience”. The nervousness is fueled by the fact that the US tax revenue is slower than expectedand the alarm about the debt ceiling grows…
** This article was written by FinanciaLounge