Analyst advises investors: This is the perfect asset in the portfolio

• Volatile market environment with high inflation
• Analyst sees Fed on lost ground in the fight against oil prices
• Energy investments for security

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Inflation rates remain high, forcing the US Federal Reserve and its officials to act around the world. Only on Wednesday did the Federal Reserve take another big interest rate step and raise the key interest rate for the USA by a whopping 0.75 percent. In order to get the rate of inflation under control, the currency watchdogs also announced that this should not have been the last rate hike.

The stock markets are sensitive to the tightening of the monetary policy, the stock markets have recently been giving up across the board. Economically sensitive stocks are particularly affected, as many investors are concerned about the fear of a recession. Tech stocks and cryptocurrencies are also among the biggest losers on the market, with concerns about rising capital costs and investors’ declining risk appetite fueling the downtrend.

In addition, geopolitical factors and an ongoing disruption to supply chains are having an impact.

Analyst advises investors to invest

While many market participants withdraw their money from the market in such uncertain times or flee to the US dollar, Warren Pies, co-founder and strategist at 3Fourteen Research, advises an alternative investment. In an interview with “RealVision”, the expert explains that there are only a few assets that could hedge the existing risks. “I think energy is the perfect asset,” says the expert.

He emphasizes in particular that the Fed’s monetary policy can hardly get the main reason for inflation, namely high energy prices, under control, since it cannot influence the price drivers of oil – geopolitics. “If we go ahead with fully sanctioning Russian oil and really get out of this deadlock that’s going on right now […] “Oil will go its own way,” he insists. That’s why it’s necessary to have energy assets in the depot.

Pies also advises avoiding company-specific risks when selecting companies in the sector. “Buy the big leaders, the big energy companies, the liquid energy companies,” the expert said. A look at Canada could also be worthwhile, since manufacturers with a large market capitalization from the US American neighboring country have “more or less lower production and maintenance costs”.

Around ten to 20 percent of the depot should be made up of energy investments, says Pies. In his view, the rest of the investments should be made up of quality companies, just “avoid the unprofitable tech stuff,” the strategist says.

Editorial office finanzen.net

More news on the topic of oil prices (Brent)

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