After an extremely painful 2022, stocks seem to retaliate. They have undoubtedly been the big stars of the markets so far. Stock market volatility has been the lowest since the pandemic, and developed markets have recorded significant gains. “And now what?” one could wonder. “Is it the calm before the storm? Or is it the end of the ‘worst recession’ that ultimately never occurred? In its report on the second quarter, UBS estimates that investors will have to indulge in balancing exercises from now on. According to analysts at the Swiss investment firm, there is an upward path for stocks, but it is ‘narrow’ and comes with risks: economic growth will neither be strong enough to force the US Federal Reserve into further rate hikes, nor weak enough so as to cause fears of a recession. The big winners of the first half Japan was not a leading player until recently. However, 2023 is undoubtedly the year of Japanese stocks which have recorded 24.3% returns since the beginning of the year. Both the eurozone and US stocks are up 15%, while globally stocks are up more than 13%. Meanwhile, gold – a traditional refuge in times of geopolitical crises and economic uncertainty – shows an increase of slightly more than 7%. As for oil, it has seen its price plunge by more than 9%. The strategy for the second half What should investors do? They can follow 7 steps: 1. Buy quality bonds. 2. Diversify income resources. 3. Look for opportunities in the stock market. 4. Prepare for a weaker dollar. In the coming months, a depreciation of the US dollar against the other major currencies is expected. 5. Balancing a traditional portfolio with placements in alternative investments. 6. Invest in real assets. 7. Opt for “sustainable” investments.
