Pimco's Fels Says a Lot Can Go Wrong in Next 3-5 Years

The video discusses the elevated risk of recession over a long-term horizon, emphasizing that near-term recession risks are low due to economic stability and cautious Fed policy. It highlights potential long-term risks, including external shocks from China and political risks in the Eurozone. The video advises investors to prepare for a potential recession by gradually de-risking and moving into safer credit spectrum areas, emphasizing the value of active asset management.

What is the current outlook on the risk of a near-term recession in the US?

• Moderate risk with some imbalances

• Low risk with no major imbalances

• High risk due to major imbalances

• Uncertain risk due to external factors

Which region is mentioned as having high political risk that could affect long-term economic stability?

• Japan

• China

• United States

• Eurozone, particularly Italy

What is one of the suggested strategies for investors to prepare for a future recession?

• Investing heavily in equities

• Moving into safer parts of the credit spectrum

• Avoiding government bonds

• Increasing exposure to high-risk assets

What is the expected impact on the market if a recession occurs in the future?

• No significant impact on the market

• Stability in the credit market

• A major bear market in equities and credit

• A major bull market in equities

Why does it make sense to keep some 'powder dry' according to the investment strategy discussed?

• To invest in high-risk assets

• To be prepared for unexpected opportunities

• To avoid all investments

• To focus solely on equities