What's Next for This Crazy, Mixed-up Market

Manager says we may have reached the bottom but are in for a tough period.

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If lawmakers cement a bailout deal soon, the market's likely to see a bounce on Monday. But then what?

Says Mike Avery, comanager of the Ivy Asset Strategy fund: "I think we're in a period where global growth—including U.S. growth—is going to be very slow for a long period of time, maybe for the next couple of years."

Avery, who runs a fund that invests in a combination of stocks, bonds, cash, precious metals, and currency, says he'll probably use the rally to get more defensive with "more gold bullion." He adds that "the equities we're sticking with I'd characterize as large-cap global brands—the Nestlés, Coca-Colas, and the Yum Brands of the world; companies that have clean balance sheets and the ability to self-finance through their own cash flow."

He says investors seeking security might look to dividend-generating investments. Stock investors in particular should consider global brands with strong balance sheets and "products and services that appeal to the middle class," says Avery, whose fund currently has 40 percent of its assets in cash, 40 percent in stocks, 10 percent in gold bullion, and the remainder in bonds.

Avery also said he thinks the market has reached a bottom in terms of ultimate panic:

"I think September 17 was the worst. To me, what stood out was that one-month Treasury bill [yields] went to negative. In 30 years, I've never seen that before. That's like somebody saying they have so little confidence in financial institutions that they're willing to take a guaranteed small loss, just for the safety of having their money in a U.S. security. That's the ultimate act of capitulation.... We may get a rally, but that doesn't mean the market goes up dramatically from here."