How to invest as inflation, higher interest rates and war markets

It’s art, wine or bitcoin BTCUSD,
A good alternative bet in these uncertain times, particularly as stock and bond investors recover from a rocky start to 2022?

With few corners of the financial markets left unscathed by volatility tied to rising interest rates, a rising cost of living and Russia’s war in Ukraine, investors have been looking for places to hide as the Federal Reserve sits tight. prepares to fight inflation at 40-year highs.

Liz Young, Director of Investment Strategy at SoFi SOFI,
a San Francisco-based online personal finance company, said investors are worth considering unconventional assets, particularly as times have gotten tougher for traditional investing, but they need to keep it simple.

“I think I like to drink my wine,” Young said, in a panel discussion Tuesday hosted by MarketWatch. “I don’t like to invest in wine.”

Watch the full discussion below on investing amid volatility, part of a two-day MarketWatch video series called “Mastering Your Money.”

Does it make financial sense to bet on wine, art, cryptocurrencies, meme stocks and more in a tough market?

For Victor Jones, chief global strategist for Chicago-based financial trading network gustotrade, it’s about minimizing downside risk as tighter financial conditions take hold.

“There was probably a group of people who came in the last two or three years who were introduced to the markets in a world where the cost of capital was cheap,” Jones said. “If you took some risk, the cost of risk was low.”

But now, “the cost of risk is accelerating to the upside,” he said, warning that investors have now started “paying tuition” to learn how to invest in times of high inflation, lower liquidity and higher volatility.

Other highlights:

  • Traditional 60/40 portfolio construction isn’t dead forever, despite this year’s big bond correction, SoFi’s Young said.

  • Financial innovations, including fractional art opportunities or crypto investing, can give investors ways to hold uncorrelated assets over a longer horizon, Jones said.

  • Meme actions are not a thing of the past, according to Jones, but the definition could change. twitter inc. twtr,
    It may not be a meme, Jones said, but it’s turning heads with Tesla Inc. TSLA,
    Chief Executive Elon Musk’s roughly $43 billion bid for the social media platform.

  • It’s not all over for tech stocks, but be careful.

US stocks fell on Friday, with the Dow Jones Industrial Average DJIA,
posting a nearly 1,000 point drop and its worst daily percentage drop since Oct. 28, 2020. The S&P 500 SPX Index,
skate 2.8%. Yields in the Treasury market marched higher during the week, with the benchmark 10-year rate TMUBMUSD10Y,
close to 2.9%, approaching the key level of 3%.

Add Comment