Global recession might not be on the cards, but investors are starting to worry that central banks are running out of ammunition, Geraldine Sundstrom, an asset allocation portfolio manager at Pimco, told CNBC Wednesday.
"Keeping your powder dry is one of the key recommendations we have … to take advantage of the market downturn," she said, adding that she was unable to give an exact date on when a downtick might come.
Risks are rising on the horizon, according to her company's outlook, with one of the main concerns being whether central banks are running towards the end of the road in terms of policy. "This is the main worry in most people's mind and (is affecting) the way we are building our portfolio," she said.
"Our asset allocation is cautious and not really risk-averse. We are really trying to steer away from negative yielding assets and really building the portfolio with core quality income at the heart of it," Sundstrom later said, adding that banks in the U.S. are good investments.
Sundstrom said she would wait until the downturn before "operating gradually" and buying up assets that had fallen in price. However, she explained that there were currently no "excesses in the system" and said there was no "overinvestment" in any particular asset which would be a typical factor to bring about a recession.