June 4 - Global slowdown fears hit stocks and commodities around the globe as investors run for safe havens. Investment strategists weigh in on how investors should play it. Jill Bennett reports.
PLEASE NOTE: THIS EDIT CONTAINS CONVERTED 4:3 MATERIAL Investors are on the run, dodging the plummeting stock and commodity markets, as the European debt crisis sparks fears of a world slowdown. Many were already on the sidelines. Investment Company Institute data shows 46 percent of U.S. households owned stocks in 2011, down nearly 7 percent from a decade ago. Milton Ezrati, Economist and Market Strategist at Lord, Abbett & Co.. SOUNDBITE: MILTON EZRATI, ECONOMIST, MARKET STRATEGIST, LORD, ABBETT & CO. (ENGLISH) SAYING: "They are fleeing from any kind of risk asset equities across the globe, credit sensitive corporate bonds even to an extent municipal bonds more on the economy here than European trouble and moving in the direction of Treasuries which are a favorite place to hide of all maturities, deposits outside of the European banks in particular mostly United states, Canada and Japan." But it's not going to make investors rich. Ezrati points out that the best investors can do in deposits and bills is half a percentage point, well below inflation. He says credit sensitive bonds including low-grade corporate bonds, municipal bonds, packaged bank loans and mortgage debt may pay more in the end. Ezrati also looks to select U.S. stock sectors, including beaten down technology and consumer discretionary stocks. But, investors should remain cautious. Alec Young, International Equity Strategist at Standard & Poor's. SOUNDBITE: ALEC YOUNG, INTERNATIONAL EQUITY STRATEGIST, STANDARD & POOR'S (ENGLISH) SAYING: "We would recommend that investors step back and wait for some real fundamental improvements ie: some news that Germany is willing to be more proactive in helping some of the poor peripheral countries in the absence of that we don't think that any rallies will be lasting in nature." Investors will face more headwinds this week as Spain plans to tackle new measures to contain the debt crisis. Jill Bennett, Reuters