The most logical option for investors is to reduce positions in equities, as it is not the safest asset class if disruptive inflation is looming, but it is also true that some areas of the market could survive well in this scenario.
Two specific sectors that will not suffer so much with inflation are technology -mainly the software part- and luxury, since “they can pass on price increases to end customers, on the one hand, and, furthermore, they are not intensive in capital, on the other, ”he assured Julián Pascual, president of Buy and Hold, which adds that, on the contrary, “sectors such as construction or industrial are dangerous with high inflation.”
Another area that could survive well is real estate. But if there is something that the vast majority of analysts agree on, it is that, beyond equities, gold, oil, and possibly even a bitcoin are worth owning if inflation bites.
“In an environment of inflation, raw materials, commodities and basic resources should perform better and that gives us guarantees for at least two quarters that these bottlenecks and supply problems that exist are remedied”, explained the analyst José Lizán, who also refers to “the great dependence that emerging markets have on raw materials.”
The manager also emphasizes the potential amount of gold and precious metals: “it has been practically eight or nine months of falls or contraction in prices, and after many months of weakness we are beginning to see the first signs of capital inflows. , not only in gold but also in gold miners. Therefore, if inflation ultimately goes beyond what was expected, gold should start to perform a little better and will probably try to attack the $ 2,000 per ounce throughout 2022 and reverse that downward movement that has occurred. had over the last year ”.
A bet, that of raw materials, shared by David Ardura Moyano, investment director of Finaccess Value, but with nuances. “You have to bet on raw materials, but especially industrial raw materials, which are the ones with potential. That is to say, for copper or oil, which we believe are the ones that are going to do well ”, he assures.
Precisely, oil is, without a doubt, the asset that has shone above all in the last month. Black gold has seen an unprecedented rally this past October that has brought Brent and West Texas to three and seven-year highs, respectively. But the upward trend could continue. Will we see a barrel of Brent at $ 100? “Quite possibly,” Vladimir Putin himself claimed during Russia’s Energy Week.
He is not the only one who sees it near those levels. GOldman Sachs believes that the price of black gold will remain very high for a long time and expects it to reach $ 90 by the end of the year. With this outlook, the strategy of many analysts is clear: bullish in the medium and long term. “Despite the fact that the US may add more oil from its reserves or even that Russia may offer more natural gas, if OPEC does not expand oil production it is difficult for its price to fall considering the world demand there is. At a technical level, it has had a slight correction, but the trend continues to be clearly positive, so there is no other option but to think about buying corrections ”, details IG analyst Sergio Ávila.
Finally, another gold, in this case what many call “digital gold”, and which are cryptocurrencies, in general, and Bitcoin in particular can also act as a safe haven and protect against inflation due to limited supply. Others, however, do not believe that it is a good option in times of uncertainty because it probably adds more volatility and its value is more of a speculative asset than a safe haven.
Source From: Ambito
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