The United States is about to enter an interest rate reduction cycle, and the investment community believes that bond investment can be deployed. Zhang Haoen, the investment director of personal and commercial banking at Bank of Communications International, said that the bank's high net worth clients have been looking for higher-rated bonds, even U.S. government bonds, with slightly lower prices and longer maturities. If investors plan to build a balanced portfolio, they can consider a stock-bond ratio of 35% and 60%, with the remaining 5% in gold assets.

Zhang Haoen stated that the outlook for European and American government bonds and investment-grade bonds is positive. After the Federal Reserve establishes the interest rate reduction, it is possible to re-evaluate U.S. government bonds. However, attention should be paid to whether the policies of the next U.S. president, after taking office, will change market expectations for inflation. It is recommended to slightly increase the maturity of U.S. government bonds from the previous recommendation of 4 to 5 years to between 5 and 7 years. As the interest rate reduction is beneficial to emerging markets including Asia, the outlook for investment-grade bonds in Asia is positive.

Hold positions in European and American stocks, particularly in the medical care sector.

Regarding stocks, Zhang Haoen pointed out that aggressive investors who can tolerate market volatility can choose high-yield stocks. Europe reduced interest rates again last week, with the reduction in marginal lending rates exceeding the benchmark interest rates, indicating that Europe will continue to reduce interest rates. This is positive for the asset market. Financial stocks (insurance, asset management), medical care, and energy stocks that pay stable dividends are preferred. As for U.S. stocks, he pointed out that the Federal Reserve's interest rate decision is imminent, and with the U.S. presidential election in November, there may be adjustments in the U.S. stock market. Defensive sector stocks, such as medical care, can be included in asset allocation.

For Hong Kong stocks, Zhang Haoen believes that the focus is on dividend-paying stocks, including domestic banks, domestic insurance companies, Chinese telecommunications companies, and energy companies. In the technology sector, some large-cap stocks, mobile gaming, and consumer platform stocks may not pay dividends. However, as interest rates in Europe and the United States decrease, funds will flow into Asia, such as Japan, Taiwan, and South Korea. As long as funds continue to stay in Asia, there will be opportunities to pay attention to and even flow into undervalued Hong Kong stocks. These large-cap technology stocks should benefit.

Recommend utilities sector stocks and Chinese telecommunications stocks for Hong Kong stocks.

Everbright Securities International strategist Wu Lixian said that utilities sector stocks, Chinese telecommunications stocks, and gold mining stocks in Hong Kong are all sectors that can benefit from interest rate reductions in the future. Among the first two, under the context of interest rate reductions in the United States, the potential return is relatively greater than that of U.S. bonds. If investors plan to have long-term dividend income, they can consider them.$CHINA MOBILE (00941.HK)$N/A.$CLP HOLDINGS (00002.HK)$ For investors who both hope for interest income and stock performance, they may consider$CHINA TELECOM (00728.HK)$.

Regarding bonds, Wu Lixian believes that international bank bonds and Asian investment grade bonds can be considered, and attention can also be paid to US government bonds. With the market expecting a total interest rate cut of 2.5% over the next two years, he has a positive outlook on the future upward trend of bond prices. In terms of commodities, he believes that with the benefit of the interest rate cut environment, there is still a chance for gold prices to reach new highs by the end of the year. He recommends a neutral investment portfolio with a proportion of 40% stocks, 40% bonds, and 20% commodities.

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