Markets should diversify their portfolios amid the escalation of geopolitical tensions, according to Swiss investment bank UBS Group AG.
UBS Chief Investment Officer Mark Haefele has recommended investors to diversify and adopt a long-term investment plan, to prepare for the moderation of the geopolitical tensions and provide a buffer should they escalate.
UBS also urges investors to make investments on commodities and energy stocks, as energy prices are widely expected to increase should tensions increase. Should conflict be addressed, demand is expected to pick up amid supply issues.
Investors are encouraged to look into assets seen to outperform amid higher interest rates, such as the financial sector, and technology firms. Senior loans are also seen to provide protection from increasing rates.
UBS expects “robust” economic and earnings growth moving forward, but noted that eurozone stocks could be hit should the conflict escalate.