How to invest with rising rates? Stocks, bonds, anti-inflation bonds, raw materials: the choices to make

A market full of discounts

2023 of the financial markets, up to now, seems to be the inverted mirror of the one that has just ended: the performances are positive on all stock lists and the same goes for fixed income. Only the energy has lost altitude after last year’s ride. Is it time to let go and put more risk in your portfolio? The truth is that you navigate by sight. With only one certainty: the value returned to the bonds. There are bond portfolios that have an implied yield of 5%, recalls Giovanni Folgori, investment manager at Euclidean. However, the equity component is hostage to the heavy uncertainty about the future trajectory of earnings, which, in turn, depends on the dynamics of inflation, the path of interest rates and the consequent slowdown in the economy: all variables whose direction is known, not yet the intensity. On the other hand, for those with a broad reference horizon, equity lists offer a favorable entry point compared to recent years: valuations are no longer expensivethe expected returns have increased, argues Michele Morra, portfolio manager of Moneyfarm.

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