Making money: what the experts think
● Whipsaw markets “A semblance of calm returned to global markets” this week after last Friday’s carnage, said Andreea Papuc on Bloomberg. But warnings that confidence would remain fragile proved accurate. Investors are still trying “to work out if the Omicron flare-up will be a relatively brief scare… or a bigger blow to the global recovery”. Stock markets in Europe and the US initially rebounded, as bargain-hunters piled in post “bloodbath”, said Investors’ Chronicle. Travel and leisure stocks such as IAG, easyJet and Ryanair, as well as Restaurant Group and pub-owner Mitchells & Butlers, briefly recovered. But the mood on both sides of the Atlantic turned sour on Tuesday, before improving again on Wednesday. Despite the temptation to buy the dip, “we are just one negative Omicron headline away from going back to where we started”, said analyst Jeffrey Halley of Oanda. Expect plenty more “whipsaw price action”.
● Self-protection
With the new variant “now setting the investment agenda”, what’s the best way to protect yourself, asked The Daily Telegraph. “Diversification should be a priority”, according to Rob Morgan of wealth manager Charles Stanley. He points to “traditional safe haven assets” like gold and bonds – tipping the iShares Physical Gold ETC, which tracks the metal’s price (and is up 41% over three years) and the Janus Henderson Strategic bond fund. Others think oil remains a strong bet. Investors should “look through” the precipitous 9% drop since Friday and stick with oil, advised UBS Wealth Management, which forecasts a 20% jump in Brent crude to $90 by March 2022. Healthcare, meanwhile, “offers both defensive and growth opportunities”. Despite big gains in some stocks (Moderna and Pfizer are up 195% and 41%, respectively, this year), the sector is “cheap”.
● Double potential
Plenty of punters stateside reckon the same is true of Amazon, which has lagged the wider market this year, said CNBC. Indeed, Jim Cramer of Mad Money has named it his top stock pick for a potential Omicron-sparked slowdown. Amazon “does well when people are scared to go the mall”, he said. And, as the “dominant player in cloud infrastructure”, it would also gain from a return to remote working.