How Barclays prefers bonds over stocks for 2023 🏦

How Barclays prefers bonds over stocks for 2023 🏦

Stocks give you partial ownership in a corporation, while bonds are a loan from you to a company or government. These are some of the basics you learn when studying financial literacy, yet, when it comes to investing, most people primarily invest in stocks. For this reason, Barclays, the giant investment bank, recently revealed that, if it came down to it, they would choose to invest in bonds over stocks concerning their outlook for 2023. So why did Barclays say this? According to Barclay’s analysts themselves: “the global equity markets may drop significantly further despite this year’s drawdown. U.S. stocks tend to bottom 30% to 35% below their peak in the middle of a recession, which suggests a “fair value” of 3,200 for the S&P 500 index at some point in the first six months of 2023″. Due to this, investors will soon be able to make 4.5% a year or more sitting on cash as they wait for asset markets to bottom. 

Moreover, the recommendation to prefer fixed-income assets over stocks comes not only in light of the recession beginning soon and peaking within the first six months of next year but because fixed incomes have “massively underperformed” equities this year and there is now “limited downside in longer U.S. fixed income” according to Barclays. If you still insist on investing in stocks over the next year, Barclays has cited “the biggest downside risks” to be in the industrials, discretionary, and materials sectors, while the least risk will be in defensive sectors like healthcare, consumer staples, and utilities. What do you think about Barclay’s recommendations? 

Want to learn how to invest? Download the Invstr app, where you can play Fantasy Finance and manage a virtual investment portfolio or open a brokerage account and invest for real. Take our interactive investing course on Invstr Academy and become a better investor today!

I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.

Share:

More Posts

ESG and Ukraine’s War ⚔

1 June, 2023

The Russian invasion has raised questions about the balance between ethical investments and geopolitical realities.

Load More
Get your daily Invstr Crunch

Get the market news and updates you need, delivered to your inbox or available on our daily podcast.

Facebook Twitter Youtube Instagram Snapchat Tiktok
learn
products
plan
Who we are
blog

Risk Disclosure:

Invstr is not a bank and banking services are provided by Vast Bank, N.A.

Brokerage and Banking services are currently only available to U.S. residents.

Invstr app and web services are provided by Invstr Ltd. Advisory services are provided by Invstr Financial LLC, an investment adviser registered with the Securities Exchange Commission (SEC) details of which can be obtained here. Securities brokerage and custody services are provided by Apex Clearing, a broker dealer registered with the SEC and a member of FINRA and SIPC. There is no bank guarantee on securities and securities may lose value.

Investing involves risk and can lead to losses. Past performance does not guarantee future results.

Invstr app and web services are provided by Invstr Ltd. Invstr+ advisory services are provided by Invstr Financial LLC, an investment adviser registered with the Securities Exchange Commission (SEC). Securities brokerage and custody services are provided by Apex Clearing, a broker dealer registered with the SEC and a member of FINRA and SIPC. There is no bank guarantee on securities and securities may lose value. Vast Bank N.A. a nationally chartered bank and member of the FDIC, provides the banking products, including the products and services related to digital asset accounts. As with any asset, the value of Digital assets can go up or down and there can be a substantial risk that you lose money buying or holding digital assets. You should carefully consider whether trading or holding Digital assets is suitable for you in light of your financial condition. Your digital account does not support wallet to wallet transferring of your digital assets (i.e. cryptocurrencies) outside the platform. Any Digital Assets in your digital asset account are not insured by any government entities, including but not limited to FDIC or SIPC. The Invstr Visa® Debit Card is issued by Vast Bank, N.A. pursuant to a license from Visa U.S.A Inc and may be used everywhere Visa debit cards are accepted. Invstr Ltd, Invstr Financial LLC and Invstr Securities Ltd are subsidiaries of Marketspringpad Holdings (collectively “Invstr”) and Invstr is solely responsible for the application services and website content.

Watchlists provided when users first access the service are not a recommendation to invest. Instead they are provided to help users better navigate the service. Users are free to edit and create their own watchlists. From time to time, Invstr will suggest instruments solely based on an individual’s interest and the interest levels of the Invstr community. The statistical and portfolio builder models generated by Invstr do not reflect actual investment results and are not guarantees of future results. Comments provided by Invstr leaders, influencers or members of the Invstr Community are not recommendations and should not be construed as such. Invstr does not endorse the content or the positions posted by them. Their investment approach, and that of the models provided by Invstr, may be different from yours and may not be appropriate for you.