I strongly expect severe recession concerns are going to arise after the end of April, and dominate the economical conversations and the investment decisions. How to best position ourselves for this?
- Gold is supposed to be safe, but when there is a large equity sell off the value of the gold might go down as well as people sell what they can
- Short term bonds can be a good option. But i frankly don’t understand the pricing of the long term bonds. the best case expectation from these tariffs is to have a one time inflation shock. How come the yield on the 10 year bond is still <4.5%? i’m not sure if that even prices in the risk premiums correctly.
- large cash holding to preserve the capital and buy the dip. the problem is i buy back too early lol. i am sure i can’t resist to be all in after a 5% drop and it will drop a lot more afterwards.
- international markets, perhaps EFA. but they might have large exposure to the changes in US consumption numbers
- real estate. people need to store their wealth in some kind of assets. europe has a stable economy where people would feel safe to move large capitals to but there is no real growth stories for companies beyond the defense sector. perhaps EU or non-US REITs can be a good options.
what would be your moves? i moved things to gold around November but i am not sure how to position things for what comes next, i.e. lots of bad economic data. currently i am thinking 30% cash, 30% bonds, 30% non-US REITs and 10% VOO or QQQ