Investors look for alternatives

NEW YORK, May 15 (AFP): Wall Street equities have had the worst start to a year since 1939, while the bond slump is the steepest since 1842, which is sending many investors on the hunt for alternatives.
As US inflation has soared to its highest in four decades, the central bank has begun to raise interest rates aggressively.
And the war in Ukraine and sanctions against Russia, together with Covid-19 lockdowns in China have added to investor anxiety about the prospects for the economy.
"For the first time in over a decade, investors face both a hawkish Federal Reserve and genuine inflation pressure," said Ross Mayfield of Baird Private Wealth Management.
"This has led to the sort of rate-driven selloff that can hit stocks ... and bonds at the same time."
With interest rates rising, bond prices are falling -- the two move in opposite directions -- so they are no longer playing the safe-haven role they usually serve when equities are losing ground.
"It is a very tough environment," said Anwiti Bahuguna from Columbia Threadneedle Investments.
Uncertainty about the persistence of inflation and the outlook for global add to the challenges, said Chaguir Mandjee, portfolio manager at Tailor AM.
"It's a headache," he said.
Retail investors share the anxiety.
"I believe this market crash is going to be much bigger than 2008," one told AFP.
"Right now I am looking to move into a mix of cash and precious metals," said the investor, contacted on the Reddit social media site, who declined to be identified.
Greg McBride, chief analyst at Bankrate, agreed a lot of investors are moving their funds out of other assets into cash, despite the fact that inflation will cause capital to lose value, unlike the situation following the 2008 global financial crisis.