Things Don't Sound Much Different Than 2011 With Europe Once Again In Turmoil And Sequestration Two Days Away

Wednesday, February 27, 2013 08:02
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Things Don't Sound Much Different Than 2011 With Europe Once Again In Turmoil And Sequestration Two Days Away

Tags: bonds | European crisis | markets

The current state of the marketplace doesn’t sound a whole lot different than it was in 2011. The Eurozone is in trouble, having never really climbed out of it.
 
And Congress can’t seem to get its act together about the budget. The equity markets quaked over the indecisiveness of the Italian election and imminent sequestration.
 
It’s all adding up to a form of March madness for the markets. What should advisors do to prepare?

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The risks aren’t as great as in 2008 or 2011 but BlackRock chief investment strategist Russ Koesterich says Treasuries are a good place to hide for the month.
 
Treasuries are not exactly a good value at these levels but they do add diversification and stability in an unstable market and economic environment.
 
TIPS are the way to go, according to Koesterich. They haven’t been as susceptible to risk on/risk off trade as the 10-year Treasury note.
 
Classic defensive stocks are expensive here so he warns against flocking to them.
 
Investment grade corporates and municipal bonds are better values and have been less volatile than the broad Treasury market.

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