Richard Bernstein, chief executive, Richard Bernstein Advisors
“Bear markets have three phases,” Richard Bernstein, the founder of the $9.5bn asset manager that bears his name and former chief investment strategist at Merrill Lynch, tells Barron’s. “The first is that investors view it as temporary, the second is that it’s worse than anyone could have expected, and finally, that it will never end.”
It’s clear that investors are still trying to guess whether the bottom has arrived and whether there are already opportunities. That suggests we are still in the first phase of this crisis.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The US is already in a deep recession that will get worse. “Unemployment is going to be a lot higher than people could ever imagine. Whether it’s 15% or 20% – who knows?”. So he still favours government bonds, defensive stocks such as consumer staples and healthcare, and gold. The time will come to buy more cyclical sectors, but “the early bird doesn’t catch the worm”, he says in a recent update for investors. History suggests that it’s better to buy cyclicals such as basic materials six months after the market bottoms rather than six months early, so wait for the economy to turn.
But we should already be asking what people will be worrying about in 12-18 months’ time. He thinks the recovery will be slow and weak, but the amount of stimulus being pumped into the economy worldwide will increase the risk that is accompanied by inflation. “We won’t have a V-shaped recovery … the only question in my mind is whether we have stagnation or even stagflation.”
-
A junior ISA could turn your child’s pocket money into thousands of poundsPersuading your child to put their pocket money in a junior ISA might be difficult, but the pennies could quickly grow into pounds – and teach them a valuable lesson about money
-
Cost of Christmas dinner jumps 6.5% as grocery price inflation rises againThe average Christmas dinner for four now costs £32.57 as grocery price inflation increases - but what does it mean for interest rates?
-
Halifax: House price slump continues as prices slide for the sixth consecutive monthUK house prices fell again in September as buyers returned, but the slowdown was not as fast as anticipated, latest Halifax data shows. Where are house prices falling the most?
-
Rents hit a record high - but is the opportunity for buy-to-let investors still strong?UK rent prices have hit a record high with the average hitting over £1,200 a month says Rightmove. Are there still opportunities in buy-to-let?
-
Pension savers turn to gold investmentsInvestors are racing to buy gold to protect their pensions from a stock market correction and high inflation, experts say
-
Where to find the best returns from student accommodationStudent accommodation can be a lucrative investment if you know where to look.
-
Best investing appsLooking for an easy-to-use app to help you start investing, keep track of your portfolio or make trades on the go? We round up the best investing apps
-
The world’s best bargain stocksSearching for bargain stocks with Alec Cutler of the Orbis Global Balanced Fund, who tells Andrew Van Sickle which sectors are being overlooked.
-
Revealed: the cheapest cities to own a home in BritainNew research reveals the cheapest cities to own a home, taking account of mortgage payments, utility bills and council tax
-
UK recession: How to protect your portfolioAs the UK recession is confirmed, we look at ways to protect your wealth.
