Recent instability in the Middle East has led to an oil price spike that has left economists befuddled and investors worried about the status of their portfolios.
If these price increases are here to stay, Morgan Stanley’s Graham Seeker sees four paths for investors to protect themselves and maybe make some money.
- Invest in developed markets over emerging markets because emerging markets have a “higher dependency on oil.” Check out 12 of those countries here >
- Buy into companies that have the power to pass on prices, notably commodities, chemicals, tobacco, and food retail. Check out Citi’s companies that will do great during the inflation wave >
- Companies will be hit by declining margins as input prices rise, so watch out for where those margins have been overestimated.
- Consumer discretionary stocks will be hit if oil prices remain high, while energy stocks should perform well.
Check out a full breakdown of those sectors here:
Photo: Morgan Stanley