In this turbulent market, opportunities are everywhere

In this turbulent market, opportunities abound, according to Mary Callahan Erdos of JPMorgan.

Stocks have been trading in a bear market this year as investors deal with inflation, Federal Reserve Raising interest rates and talking about a possible recession. on Wednesday, and Standard & Poor’s 500 It rebounded after hitting a new year low in the previous session.

“As the world focuses on all the black swan events, white swans will appear,” Erdos, CEO of JPMorgan Asset & Wealth Management, said at the CNBC Investor Summit, Alpha Delivery in New York City on Wednesday. “Watching those white swans and… staying invested in these markets is one of the most important things and one of the hardest things.”

A black swan is an unexpected event that results in a panicked selling, while a white swan is a predictable and treatable crisis.

Continuing to invest means finding the right opportunities.

“There are alphas everywhere,” Erdos said. “It’s in stocks. In bonds. In currencies. It’s in real estate. It’s in private markets. It’s in public markets. It’s everywhere, because we are in such a state of change.”

Alpha mainly refers to returns that beat the performance of the market.

Specifically, Erdos sees a huge amount of opportunity in China, although she admits that the country’s complex market may not be for everyone.

“Don’t fight investment in China,” she said. “It’s a country that’s going to come out of Covid. It’s a country that will put 22% back in employment for young people. It’s an economy that will continue to invest in electric vehicles, semi-autos, etc.”

She added that China is moving towards the “Made in China 2025” goal of becoming a global technology leader.

She also loves British banks, saying they might be “the most interesting thing you can invest in.” The country’s market and economy were in turmoil. on Wednesday, and The Bank of England bought UK bonds Trying to calm market chaos.

She said: “Last week people said don’t invest in one thing in the UK, and that’s exactly when people like us, and people in the room, are thinking, ‘Let’s go and look there’.

For John Fasky, head of the Americas division at Temasek, most of his investing activity is in the private market. For now, he’s anticipating a drop in some seasons, so he’s pulling some cash from favorites and planning to come back at a lower price in the future. Includes companies like PayPalAnd the visa And the Bill.comHe said.

In the long run, investors should be prepared for the high possibility of a recession in 2023 or 2024, said Roger Ferguson, a former CEO of the TIAA and a former vice chair of the Federal Reserve.

“The potential for a recession is really high,” he said.

However, investing is a long-term activity. He noted that investors should look for four or five major trends that will create investable opportunities in the next decade or so, as well as markets that need turbulence.

Major trends include population aging and increased longevity, the latter being Ferguson Hopes will return. This means research in health care, he said.

The other trend is defense spending, which is likely to rise, and some form of globalization. Ferguson noted that investors will also have to get used to inflationary pressures.

“The Fed will work hard to get it [inflation] lowest. I think even their own show doesn’t get them there as quickly as they would like.”

For those who might be afraid of stocks due to inflationary pressure or the possibility of a recession, Erdoes noted that history provides the answer to why you are committed to investing. You usually have the best returns over a 10-day cycle, she said. Therefore, missing the top 10 days in any market environment will cut your returns in half.

“When you think about the people responsible for very large sums of money, everyone in this room, it’s irresponsible to be negative about what you’re doing right now,” she said.