LONDON, July 6 (Reuters) – If history is any indicator of the future, the first two weeks of July could bring relief to investors after a bruising first half.

Global stocks have lost more than $20 trillion since hitting record highs in January.

Most major markets are firmly entrenched in bearish territory as policymakers scramble to control soaring inflation without crushing nascent growth.

However, the half-month price changes since the 1930 numbers show that the first two weeks of July have historically offered the best returns of the year for S&P 500 (.SPX) investors.

After three straight quarters of declines in S&P 500 stocks, with the index down 20% year-to-date, some investors have said they are ready to buy the dip. The S&P 500 has edged up 0.16% so far this month.

As volatility continues to dampen global equities, a JP Morgan survey showed that two-thirds of investors are likely to increase their equity exposure in July.

The story offers short-term cause for hope in a gloomy backdrop for equities, said Paul O’Connor, head of multi-assets at Janus Henderson Investors.

“We’re seeing record short selling, we’re seeing a very big rebalancing in equities, probably… in Europe and the US. Of course, just rebalancing because we’ve had such a big drop in equities,” a- he declared.

In the last week of June, another $5.8 billion left global equities, with outflows from developed stock markets outpacing emerging markets, according to BofA figures.

NO PLACE TO HIDE

The first six months of the year have been brutal for investors. Goldman Sachs analysts said a 60/40 portfolio strategy, which follows a standard portfolio technique of keeping 60% of its assets in equities and 40% in fixed income, posted its worst first-ever return. semester since 1932, down 17%.

UBS suggested using the stock sell-off and volatility to selectively build longer-term positions.

In an environment of high inflation, the Swiss bank said value stocks, including energy and UK equities (.FTSE), could continue to outperform, particularly if confidence grows in the ability of corporate earnings. companies to remain resilient.

But market participants are advising caution, anticipating a few stormy months ahead for risky assets amid rising interest rates and concerns about economic growth.

Recession fears, the rising cost of living are keeping consumers on their toes, while a spike in natural gas prices and a slew of economic indicators have heightened concerns about the health of the global economy.

“The problem is that if we look beyond that (fifteen-day window), things look tricky,” O’Connor said. His team will use any potential seasonal upside in July to sell into the rally.

Both UBS and Goldman Sachs have recommended putting in place defenses against a potential economic meltdown, which would cause corporate earnings expectations to weaken.

Reporting by Joice Alves; edited by Jason Neely

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