Column: Market crash improves long-term return outlook, but the short-term looks very shaky

The current market turmoil has made risky assets like equities and credit bonds more attractive for the long-term investor. However, with a high risk that a global recession of uncertain magnitude is coming, the short-term outlook looks very shaky, even in spite of huge monetary and fiscal policy responses.

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The extreme turmoil in global financial markets continued unabated last week, with price volatility across equity, credit and bond markets several standard deviations above normal.

At one point, global equities were down by 17 percent, before rebounding strongly on Friday, but still ending the week deep in the red. Credit and bond markets experienced huge spread widening and rapidly deteriorating liquidity and wider bid-offer spreads.

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