This Bear Market Has Changed the Rules

Editor's Views: This bear market has been a long time in the making and will change the investing rules - and why income investors need to be cautious

Holly Black 3 April, 2020 | 11:55AM

editor

The weird thing about this sell-off is that nothing is behaving as it “should”. The traditional market theory goes: equities down, bonds up. Uncertainty? Head for gold. Developed markets looking dodgy? Go to emerging markets. Investments are often a bit of a seesaw with opposite assets behaving in opposite ways and, for the most part, that’s nice and easy to understand.

Not so this time round, it would seem. Sure, the gold price initially soared but it also then fell back; fears about a recession have pushed down the price of corporate bonds; and export-reliant emerging economies are having to cope with the double whammy of a collapse in the oil price and the coronavirus pandemic. The upshot is pretty much everything is down. There have been few places to hide in this sell-off.

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About Author

Holly Black  is Senior Editor, Morningstar.co.uk

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