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Overweight China, US and Japan equities; diversify into gold and commodities: DBS

Lim Hui Jie
Lim Hui Jie7/7/2022 08:41 PM GMT+08  • 8 min read
Overweight China, US and Japan equities; diversify into gold and commodities: DBS
Photo credit: Bloomberg
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Inflation is the word on the lips of every investor right now. With the world’s economies reeling from the Covid-19 pandemic, broken supply chains, and the first major conflict on the European continent since 1945, prices of everything from grain to crude oil are skyrocketing.

In efforts to tamp down the run­away prices, the US Federal Reserve has started raising interest rates. In­terest rates have surged by a total of 150 basis points since March and are forecast to rise to 3.25%–3.5%.

While higher interest rates are expected to negatively affect the earnings of most companies, banks stand to gain from a potentially big­ger earnings margin as they lend at higher rates.

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