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Nevertheless, though there’s no clear line between one part and the following, weaker financial knowledge recommend that the second part involving period is approaching.
“On this second part, we wish to start embracing longer-duration and higher-quality fixed-income devices, corresponding to 10-year authorities bonds,” they are saying. “By growing period and high quality whereas transitioning to longer-dated authorities bond yields, traders will probably be mitigating danger whereas additionally probably growing their return alternative.”
For the third part, as soon as spreads widen on the market’ll be a time to reallocate to excessive yield. “This simply isn’t it,” they are saying.
Trying forward
Whereas the primary half of 2023 was higher than anticipated for each the financial system and markets, Nia and Headland stay cautious concerning the outlook for the remainder of this yr and subsequent. “An absence of market volatility can provide traders a false sense of safety,” they are saying, including that the long run stays clouded with uncertainty round a slowing world financial system, geopolitical dangers, sticky inflation, and central banks pivoting again to larger rates of interest.
“Regardless of these potential prospects, the chance is ripe for the affected person and versatile investor to take benefit,” they conclude. “We have to stay centered on the highway forward to ensure we arrive at our vacation spot.”
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