PIMCO's 6 rules for surviving market volatility

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This week PIMCO, one of the globe’s biggest bond fund managers and member of the Allianz group of companies, released a manifesto on how to navigate a global investment outlook which is “stable but not secure”.

It was a long and involved piece on the risk facing the global economy and global markets.

But in the end PIMCO distilled its thinking into 6 easy to understand rules it, and other, investors can use over the next 3-5 years.

    1. Be patient.
    2. Be tactical and flexible.
    3. Provide liquidity when others need it (that means buy during panics).
    4. Prepare for market turning points. This is one of the key advantages of active management.
    5. Avoid or underweight assets that solely or primarily rely on central banks to support valuations.
    6. Hedge against a tail scenario in which inflation overshoots central bank targets. Although this is unlikely in the near term, the risk is significant over our secular horizon.

Rules to live by.

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