The Dow Jones Industrial average has rebounded more than 27 per cent from its low since March 23, supported by a series of stimulus policies from central banks and governments around the world. Investors are concerned about the possibility of a recurrence of health incidents, and UBS offers three scenarios and coping strategies.

Specifically, Mark Heffler, chief investment officer of global wealth management at UBS, said that in addition to the second outbreak of health events, the future rebound was constrained by the international situation and US stock valuations.

Combining these factors, Heffler reveals three possibilities in the future and their corresponding investment plans.

1. Upside prospects

Under the circumstances, UBS analysts expect the blockade to be eased in May and June and will not need to be reintroduced later. "in the upside outlook, we expect some underperforming market segments, including cyclical stocks and value stocks, to start to outperform the market. "

Mr Heffler stresses that not all previously flagging segments will rise. He suggested that in Europe, investors should focus on Germany and European monetary union industrial stocks, while in the US, they should target medium-sized stocks, especially those benefiting from a rebound in household consumption.

"if the economy recovers, people will naturally expect the valuation style to be favored, but the best way to invest may be US energy stocks and the UK stock market," Heffler said. Since the dollar is likely to depreciate in this case, the best currency bet against the dollar may be sterling. "

2. Neutral prospect

In a neutral outlook, Heffler expects economic activity to return to normal in May and June, but "economic function will not fully return to normal until December".

This will be good for credit, especially US investment grade LQD, and high-yield corporate bonds, dollar emerging market sovereign bonds and green bonds. It will also confirm some of the bank's long-term investment arguments, such as telemedicine, genetic therapy, automation and robotics.

3. Downside prospects

Mr Heffler points out that in a worst-case scenario, it is difficult for investors to find safe assets of attractive value. Although investors are likely to buy 10-year US Treasuries to seek refuge, "their yields are already so low that they actually guarantee long-term damage to purchasing power." "on the other hand, gold may rebound in this outlook.

Although consumer demand fell sharply during the spring, deflation is more likely than inflation in the short term, and the market reflects low inflation expectations.

But US inflation-protected bonds (Treasury inflation-protected Securities) may perform better if there is inflation or inflation uncertainty. Mr Heffler points out that this may be more likely than investors realize, "given the high level of public debt and doubts about the independence of central banks. "

Investors can also choose to manage actively in a variety of ways, such as hedge funds or dynamic asset allocation funds.

Gold may be an asset with high certainty.

It is worth noting that in all three scenarios mentioned above, gold faces investment demand. Because gold assets have performed well against a backdrop of extreme deflation and inflation.

Grosskopf, portfolio manager at DWS Group, the asset manager, said that if more economies reopened and there was a strong recovery in some areas, there would be inflation and gold "will perform well when the bond market collapses".

On the other hand, if the virus continues to spread and the economy is mostly shut down, "there will be more money printing and devaluation, which is also good for gold. Still, that doesn't mean gold is free from suffering during the liquidity or credit crisis, as it did in March, he said.

London gold now hit $1765.3 an ounce on May 18, the highest level since 2012. Groskopf expects gold to reach $1800 an ounce by March next year. "despite the rise in stock prices, given the uncertainty in the market, we still see gold as a good hedge," he said. "

In the long run, gold is likely to reach $1900 or more over time. Groskopf said the support for gold prices includes the continued adjustment of the stock market, "long-term inflation expectations." Significantly higher than the current goals set by the central bank "or new economic or geopolitical conflicts.