'The cycle is edging towards the end but we do not expect a recession in the next 12–18 months, especially now that central banks have turned more dovish.
As the credit cycle approaches its later stages, more strategic plays are required to make the most of market uncertainty, says Jean-Christophe Gerard, the new head of Barclays Private Bank EMEA.
"Markets are easily unnerved by a string of bad data, as happened last December, and current geopolitical tensions add to this nervousness," Gerard told Business Insider in an exclusive interview.Investors need to prepare for late-cycle volatility by taking tactical precautions with their portfolios — even if the chances of a recession in the next 18 months are slim.
While the Federal Reserve has shifted to a more moderate approach to monetary policy — a decision at least partially enabled by sluggish inflation — Gerard says investors would be wise to brace for a shock. He says it's simply prudent behavior for a late-cycle environment. In terms of specific inflation hedges, Gerard says traders should look at inflation-linked bonds, gold, real assets as well as stocks with pricing power and low price-elasticity.
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