Investors should focus on income-generating stocks and precious metals, because those assets will hold up well in a recession that's just around the corner, says Gluskin Sheff economist David Rosenberg.
Stocks that provide reliable dividends and in companies that carry low debt-to-equity ratios are good picks, while gold is a wise choice, too.
Rosenberg has predicted a return to recession on the grounds that the economy is not strong enough to stand on its own two feet without the help of stimulus measures, which have ended.
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Even within the equity market "there are ways to garner relatively safe income, which is becoming increasingly scarce. The era of aggressive growth is giving way to an era of income equity as the boomers switch more and more of their capital into hybrid strategies," Roseberg says, CNBC reports.
"If you ask me, this has been for the past two years, and remains, the most compelling risk-adjusted strategy. It is akin to playing the role of landlord: get paid an economic rent while the property appreciates over time."
Others agree that the U.S. and other major economies are headed for troubled times ahead even if they avoid recession.
A "perfect storm" of fiscal woes in the U.S., a slowdown in China, European debt restructuring and stagnation in Japan may converge on the global economy, New York University economist Nouriel Roubini has said, according to Bloomberg.
"Everybody’s kicking the can down the road of too much public and private debt. The can is becoming heavier and heavier, and bigger on debt, and all these problems may come to a head by 2013 at the latest."
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