Outlook for 2009: invest in several asset classes and diversify risk (EUR)

According to economists at Credit Suisse, the global business environment in 2009 will again be characterized by serious economic concerns.

Global economic growth is likely to be only modest, with emerging markets as the sole drivers. The state of the G3 economies - the US, Europe and Japan - will not improve until the second half of next year, according to Credit Suisse forecasts. In the past year, global stock markets posted their worst performance since 1932. Prices have fallen to attractive levels, although a certain degree of uncertainty remains. With a view to 2009, the Credit Suisse experts advise spreading risk across several asset classes that have little correlation to each other. Safe investments, such as bonds of borrowers with a state guarantee and good credit ratings, remain attractive. For shares and corporate bonds, investors can exploit existing upside potential by selectively buying stocks in defensive sectors and shares of companies with good sales prospects in emerging markets. For investors with a long-term horizon, investments that retain their purchasing power such as gold or inflation-protected bonds offer attractive entry options. As far as currencies are concerned, hedging of the US dollar - for which experts were forecasting devaluation - is likely to be decisive.

The business environment in 2009 is once again likely to be characterized by serious economic concerns, according to Credit Suisse economists. The economic data is still declining, and some of the key indicators, such as the German Ifo business climate index, are stuck at historically low levels. Recessionary trends seem set to shape the next few months in many industrialized countries. A slight rally is likely only later in the year.

Investors should continue to expect a low-interest environment in 2009. By stepping up its measures to secure liquidity, the US Federal Reserve has taken a quantitative approach to loosening monetary policy that goes beyond merely cutting interest rates. The Fed and the US Administration have approved a package worth more than US $8 billion to overcome the crisis. Parts of these measures involve the US Federal Reserve financing the purchase of securitized debt - including credit card debt - and buying mortgage-backed securities in order to reduce the financing costs. Further government action to crank up the economy is expected in 2009. Owing to their increased influence on global economic growth, government-sponsored stimulation programs in emerging markets will be the focus of the financial market's attention. Credit Suisse economists predict global growth to be driven wholly by emerging markets next year.

Currencies: Hedging of the Dollar Will Be Crucial
Despite the pronounced deterioration of America's economic data and very low US interest rates, the dollar strongly appreciated since July 2008. Credit Suisse analysts attribute this to extraordinary capital flows in particular. Currency discrepancies at European banks as a result of high writedowns, deleveraging, capital repatriation to the US and less diversification of emerging markets' reserves of other reserve currencies are allowing the greenback to gain ground. The launching of a comprehensive package to stimulate the economy by the new US government or problems related to the refinancing of emerging market debt could prolong the US dollar's rally vis-

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