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Markets Are 'Really Schizophrenic', Go Alternative: Strategists

CNBC.com
Monday, 13 Sep 2010 | 12:27 AM ET

The recent rally in equities cannot be sustained as the markets are "really schizophrenic" right now, said Kirby Daley, senior strategist at Newedge Group on CNBC Monday.

"Long-term investing in equities, as people have been used to doing, I think is coming to an end for a while," he said.

No Sustained Equity Rally
Markets are "schizophrenic" right now, says Kirby Daley, senior strategist at Newedge Group. He advises investors to take a step back, while Karsten Schroeder, CEO, Amplitude Capital, says investors should be careful about bonds. They share their investment strategies, with CNBC's Martin Soong & Sri Jegarajah.

Investors should take a step back, let the U.S. elections play out, and see how far growth will fall off going into 2011, Daley continued

"There is no way that risk-on is coming on forever. But it's going to be back and forth. It's a very difficult market to trade," he added.

Go Alternative

Instead, Karsten Schroeder, CEO of hedge fund Amplitude Capital, advised investors to look at alternative investments amid a slow-growth environment.

"It's going to be a little more difficult to find interesting opportunities, but I guess you have to go strong on alternatives," he noted, highlighting the need for un-correlated return streams.

"Volatility is not really that high...(and) we see range-bound markets. I don't see any reason for a change in particular on the equities side because the major economies won't quickly recover, " Schroeder explained.

"Stronger alternatives, especially CTA (commodity trading advisor), macro, FX, commodity-type uncorrelated strategies...not the typical equity long-short (ones)...will be the strategies that will outperform going forward," Daley concluded.

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