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Investing in 2022: Omicron, the Fed and your age matter
Financial advisers agree on the need for retail investors to diversify their portfolios, but they differ on the details.
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The COVID-19 pandemic, which has hit a lot of industries hard, has also propelled the growth of Indonesia’s e-commerce platforms and lured foreign funds into the domestic capital market. (Shutterstock/William Porter)
L
ast year’s global stock market rally and uncertainty about the economic recovery has many retail investors wondering whether it is time to shift to other asset classes.
The Jakarta Post has asked investment professionals for their views on how to arrange a portfolio for the year ahead.
While there is no silver bullet and opinions vary, diversification is generally considered key to preparing for uncertain times. Stocks, bonds, gold and other assets all have a place in a well-balanced portfolio, but the share of each may be adjusted depending on market developments and investors’ personal risk appetite.
Analysts told the Post that retail investors should anticipate moves by the United States Federal Reserve, as monetary tightening by the US central bank would affect all types of investment, each with a different outcome.
A further recovery of domestic demand in Indonesia, on the other hand, could justify more exposure to Indonesian stocks, even though these would be considered riskier in the event of Fed tightening.
The emergence of new coronavirus variants would still have an impact on markets, albeit not as terrifyingly as earlier in the pandemic, as much of the risk is already factored into markets now.
Read also: Indonesia’s GDP seen to grow 5.1% despite Omicron threat
