How to invest in the markets in the light of recent developments between Russia and Ukraine? Second Alessandro Fugnoli, Kairos' strategist, it is better to assume that of a crisis that will remain acute for a long time to come, but remaining under control, with a tailspin scenario where the tension eventually boils over into a military conflict. In this forecasting framework, “they go into wallets scale back undefensible positions or because they are leveraged, or because they are too aggressive with respect to individual risk propensity”, says Fugnoli in the last episode of his "Fourth Floor" Podcast.
Focus on defensive and quality stocks
Barring new events – continues the analyst – it is worthwhile maintain the essential of the positions, if anything, trying to improve his profile with an adequate quantity of defensive and quality titles.
How to invest in oil and gas
With regard to commodity, investments in oil and gas - whose quotations are currently at their highest levels - may make sense, continues Fugnoli, provided that they are used for this purpose "modest amounts".
Gold and options
Even gold, the safe haven asset par excellence, "may still be interesting", but only "if it maintains limited fluctuations".
The path of "buying protection with options" is less advisable, because, underlines the Kairos strategist, there is the risk "of paying for it dearly".
The dollar
On the currency front, however, the dollar is "relatively cheap": in case of conflict, after all, the normalization of monetary policy would be slowed down, if not even stopped. Interest rates would therefore not undergo the increases currently expected and this would give support to all financial assets.
Favor short and safe bonds
Finally, how to invest the new liquidity investments? According to Fugnoli, "at the moment it is better to favor short and safe bonds".
And the reason is simple: "Trading in nervous and volatile markets risks finding us displaced - concludes the analyst - because price adjustments to good and bad news would be immediate" and one cannot "stay awake 24 hours a day and react in time for everything that happens”.
