The latest Deutsche Bank survey shows that if inflation remains at 3%-5% over the next 10 years, real estate will be the most popular asset class for investors to buy and hold.
This is followed by developed market equities and gold.
Real estate will be the most popular asset class for investors to buy and hold if inflation remains at 3%-5% over the next 10 years, followed by developed market equities and gold, according to the latest Deutsche Bank survey.
Deutsche Bank analysts said that while property prices have soared globally during the pandemic, real estate is the preferred store of value in an inflationary environment. Investors prefer stocks to gold, even though gold performed extremely well during the inflationary period of the 1970s.
Specifically, about 43% of respondents said that real estate is the most worthwhile asset to buy and hold, 33% prefer developed market equities and 15% prefer gold. Cryptocurrencies are “off the radar,” with only 1% listing them as their preferred asset, compared to 4% who prefer cash.
The data showed that the annual rate of the U.S. personal consumption expenditure index fell to 6.3% in April from a 40-year high of 6.6% last month, the first decline in a year and a half.
In addition, 69% of respondents believe that the only way to control soaring inflation is through a recession. 61% of respondents believe the Fed will work to bring inflation back to target, even at the risk of an economic slowdown.
Only about a quarter of respondents think the Fed will raise rates by 75 basis points over the next 18 months, and more than half think the European Central Bank will follow the Fed in raising rates by 50 basis points in the future. German inflation hit its highest level in nearly 50 years in May, data showed on Monday.
78% of respondents believe the U.S. economy will be in recession by the end of 2023, up from 61% in April and 31% in February.
Last week, the S&P 500 and Nasdaq Composite ended a seven-week losing streak. But two-thirds of respondents said the stock market has yet to bottom out.
Editor/Annie
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