Geopolitical tensions, pandemic, inflation, and measures taken by central banks, which characterize this peculiar historical period, are strongly affecting financial markets. In an ever-changing situation, preserving one's funds and investing in long-term securities remains a fair and sustainable choice.
ESG investments, which place the focus on environmental, social, and governance issues, have become a crucial element of the financial markets in recent years. The pandemic has further reinforced this trend.
Investors' continued interest in topics concerning the environment has also led to a wide spread of green bonds, which are related to projects that have zero-emission impacts, such as clean energy production and increased energy efficiency. At this juncture, the European context, remains the frontrunner, both in terms of innovation and volume. Indeed, data in hand, it is possible to see how new European emissions are closely linked to a general view regarding ESG structures and projects. On the other hand, continuing international tensions, converging in the war between Russia and Ukraine, have brought to light risks that can mutate across assets and defined a strong period of stress for the market.
Following an initial moment that saw a wave of general panic, with sudden changes in variables, including the rise of the gold price, which reached hardly desirable levels, the situation stabilized.
Portfolio diversification has proven to be a successful and profitable strategy. In this perspective, risk management, is always counterbalanced by the different securities present, covering the limitations derived from any earthquakes in the economy.
A good portfolio must necessarily include securities from different categories, so that credit and/or interest rate risks are actively hedged. This type is closely related to a risk that can be defined "managed" because it allows investors to be active, maintaining a dynamic approach, but avoiding setbacks due to high volatility. The period of deep inflation we are facing, with a sharp rise in prices coupled with little economic growth, has led to the outlining of some strategies to protect against possible uncertainties. Because of their growth potential, stocks are a good long-term insurance against inflation, particularly if you concentrate on companies that have increasing pricing power. They can control costs to keep profit margins low or pass on price increases due to strong demand for their products. In particular, the focus is on companies related to financial technology, which include Biotech, Fintech, Cloud Computing, or Online Payments sectors. The ability to invest strategically and in a targeted manner, following interactions with qualified professionals, is certainly a considerable added value in the markets that will emerge.
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