Many major investors are selling everything from stocks to bonds to gold in order to raise U.S. dollars.
Speaking of desirable cash levels, Gary Dugan, CEO of Purple Asset Management didn't mince his words when he spoke to CNBC on Monday: "Whatever number you have got, double it. If you are at 10 percent, make it 20 percent."
Cash is king not only for investors, but also for businesses. Looking for companies that have strong balance sheets, less debt, stable cash flows and carrying a respectable dividend yield are the preferred plays. Some fund managers, such as Sat Duhra from Janus Henderson, believe the most attractive sectors in Asia are REITs, telecom and infrastructure assets. "These sectors remain favored in times of extreme volatility, and sharp market draw-downs given their defensive nature," he said.Other assets that are drawing investor interest include China A-shares. The Chinese yuan — both offshore and onshore — is also gaining investors.
Applying that calculation to today's markets would imply the S&P 500 index bottoming out at around 2,200 — or another 8 percent from current levels. But no one can be certain, of course.
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