Play market gradually: Amundi

covid-19/coronavirus/buy/market/

14 April 2020
| By Chris Dastoor |
image
image
expand image

Trying to time to bottom of the market is unrealistic and investors should gradually consider opportunities to rebalance their long-term strategic allocation, according to Amundi Investment Management.

COVID-19 had led to a massive sell-off and investors could take advantage of the potential sequence of market opportunities that would emerge from the crisis.

“We know that the financial cycle leads the real cycle. Markets will bottom before the real cycle has completed its downward trajectory, and, based on history, their recovery will be ahead of and will drive the recovery in the real sphere by three to six months,” the firm said.

The firm said the sell-off had eliminated deviations in equity returns and in credit spreads, but not at the same pace everywhere, and the sell-off had not priced a permanent loss of potential growth.

“From an investment perspective, to detect the tipping point of the crisis, investors will need to look at the corporate-bond asset class where there is a race against time between liquidity and solvency,” the firm said.

“The de-freezing of the credit curve – crucial at the short end – will be necessary for validation of a full recovery in markets.

“Bounces in equity performance have masked this, but this is the indicator to watch.”

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

The succession dilemma is more than just a matter of commitments.This isn’t simply about younger vs. older advisers. It’...

1 week 3 days ago

Significant ethical issues there. If a relationship is in the process of breaking down then both parties are likely to b...

1 month ago

It's not licensees not putting them on, it's small businesses (that are licensed) that cannot afford to put them on. The...

1 month 1 week ago

AMP has settled on two court proceedings: one class action which affected superannuation members and a second regarding insurer policies. ...

3 days 12 hours ago

ASIC has released the results of the latest adviser exam, with August’s pass mark improving on the sitting from a year ago. ...

1 week 6 days ago

The inquiry into the collapse of Dixon Advisory and broader wealth management companies by the Senate economics references committee will not be re-adopted. ...

2 weeks 6 days ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Powered by MOMENTUM MEDIA
moneymanagement logo