fears of a recession have mounted since the us federal reserve began hiking interest rates in early 2022 although the latest gross domestic product gdp figures indicated growth a recession could be imminent according to david rosenberg president of rosenberg research and former chief north american economist at merrill lynch “the leading indicators are telling me that the recession is actually starting this quarter” he said in a recent youtube interview with blockworks macro “if it’s not this quarter i think it’s next quarter it’s certainly not a 2024 story” with rampant inflation many americans are grappling with wages that struggle to keep up with the rising cost of living should a recession materialize it could result in greater financial hardships “a recession is a very big call because it is actually a haircut to national income its as if the whole country takes a pay cut” rosenberg explains “its not that we take the lamborghini from 80 down to 20 its that we go in reverse” meanwhile a recession could also spell trouble for the stock market expecting a recession in 2023 dont miss these stories from benzinga   why warren buffetts investing strategy is more relevant than ever in todays real estate market   this fund is looking to grant moderate returns if the real estate market doesnt collapse – and spectacular if it does stocks had a terrible run in 2022 with the sp 500 plunging 194 while they’ve bounced back a bit in 2023 the benchmark index is up 9 year to date rosenberg doesn’t believe the turmoil is over “i am bearish on equities as an asset class” rosenberg said adding that he doesn’t believe “a recession is fully priced in” the reason behind his negative outlook on equities has to do with valuation “i don’t like the valuations i mean we’re pressing against a 19 forward multiple” he said referring to the forward pricetoearnings ratio “so what does that get you like 53 as an earnings yield i can pick up 54 in singlea tripleb corporate credit … wind up in a better part of the capital structure” what rosenberg means is that investmentgrade corporate bonds triple b is the lowest credit rating still classified as investment grade are now offering decent yields compared to the earnings yield of stocks and because debt has priority over equity in a company’s capital structure bondholders have a higher claim on a company’s assets and income than shareholders corporate credit could be an opportunity indeed amid rising interest rates numerous opportunities have emerged for yieldseeking investors many savings accounts today pay high interest rates meanwhile private credit investments can offer even bigger yields for investors who want to diversify their portfolios but aren’t satisfied with most savings accounts or certificates of deposit cds rosenberg has a price target of around 3200 for the sp 500 the target is based on his assumption that the us economy will enter a recession resulting in a “classic 20 hit to earnings” at the same time he assumes that multiples will bottom at 15 or 16 because the sp 500 currently sits at 4169 the economist’s target implies a downside of 23 it’s not a good picture but there is a silver lining “it will be painful if youre long but if you have the dry powder and the liquidity youll be able to pick up assets at better levels as you always do in a recession” rosenberg said in other words when the recession comes and stocks tumble investors can take advantage of better prices by buying the dip “the beauty of recessions is that they cleanse and they move assets from weak hands to strong hands” he said as you’d expect from this projection rosenberg is not heavily invested in stocks at the moment he said his portfolio has the lowest weighting in equities since 2007 so where is he putting his money “i have longshort strategies i have bonds and i have gold and i have some alternatives” he said “i’m trying to be as noncorrelated with gdp as possible” these days it’s easy for retail investors to tap into recessionresistant alternative assets plus some of these assets could help investors diversify their portfolios while also providing a passive income stream   while reits are struggling private market real estate pulls in huge returns   peoplefirst real estate fund shares rent with tenants while generating strong returns for investors