Commodities or Cash? Overheat or Stagflation? Please Vote
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The below pretty clock shown here was created by Merrill Lynch.
The investment clock captures two important truths:
- Capitalisteconomies follow a business cycle.
- No sector of the economy, or asset or company exists in isolation.
In detail:
Market under Reflation/ Reseesion Period with GDP ⬇️& CPI⬇️, Investors are encouraged to hold Government bonds >Cash> Stocks> Industrial Metals
Market under Recovery Period with GDP⬆️ & CPI⬇️, Investors are encouraged to hold Stocks > Energy Commodities > Corporate bonds > Cash
Market under Overheating / Boom Period with GDP⬆️ & CPI⬆️, Investors are encouraged to hold Precious Metals > Stocks > Cash / High Yields Bonds
Market under Stagflation Period withGDP⬇️& CPI⬆️, Investors are encouraged to hold Cash > Soft Commodities / Inflation-Linked Bonds > Stocks
The following image shows how the different sectors or assets do well at different points in the business cycle:
What's your opinion on where the stock market stages now? Overheating or Stagflation? What's your investing strategies?
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The latest news today that the US is imposing a ban on Russian oil is going to exert greater pressure on escalating oil prices. OPEC members are also not increasing their oil production despite US calls to do so.
This will almost certainly lead to Stagflation! Runaway Inflation with the economy slowing down.
The best way to get through this situation is through diversification into different classes of assets including stocks, properties, gold, bonds and cryptocurrencies. Also to invest in quality stocks like Apple and Microsoft which will reap bumper rewards long term.
Hopefully a peace treaty can be negotiated as soon as possible to avert a humanitarian crisis and devastation in world economies. 🙏🙏🙏
@MillionaireTiger Commodities or Cash?
@TigerStars
季度趋势显示GDP和CPI都在增长（上一读分别为7%和7.9%，为40年来最高）。美国经济被认为过热，并促使美联储加息计划。俄乌冲突抛出了一个“曲线球”，扰乱了供应链，导致大宗商品价格飙升，加剧了CPI高企。随着消费者支出和商业增长的削弱，GDP将不经意地放缓。甚至国际货币基金组织现在也将全球GDP预期下调了1.5%，美国可能会走向滞胀。黄金和能源部门使用$SPDR黄金ETF(GLD)$ $能源ETF(XLE)$ 这将是我的投资选择，但我准备获利持有现金，并转向更具防御性的公用事业和医疗保健$公共事业指数ETF-SPDR(XLU)$ $健康照护类股ETF-SPDR(XLV)$ 当市场和经济走下坡路。
Recent correction based on TA could mean Markets have already topped in Jan 2022, and we are entering early bear? Economic cycle which lags Markets showed it could be overheating and peaking soon, evidenced by very high but slowing increase in GDP and CPI. Given this backdrop (based on the cycle diagram) it would be too late to invest in Energy and Precious Metals as they are near or have peaked. Consumer staples, Healthcare and Utilities $Consumer Staples Select Sector SPDR Fund(XLP)$ $Health Care Select Sector SPDR Fund(XLV)$ $Utilities Select Sector SPDR Fund(XLU)$ might be better bets to trades. Given current 24/7 news cycles and algos dominated trading environment, expect large and fast up and down swings, and money can be made, and lost quickly. So have to nimbly take profits, respect stops and size positions smaller, to minimise incurring large losses
Accumulate green stock, reduce tech stock, hedge with gold & commodity, buy dollar. Pure speculate do not follow 😬