Oil will be the biggest risk to global inflation

Inflation is a risk to your portfolio, better get some protection while you still can

If one looks at the current global supply levels of Oil, there’s most certainly no shortage of Oil so to say as the most recent increase in oil prices is driven by the artificial shortage which has been brought about by OPEC and OPEC+ members. Fair enough, the COVID-19 pandemic has created numerous supply chain challenges, some of which are yet to be resolved, so it is to be expected to see supply constraints from an operational point of view.

What does this mean for your portfolio?

At the end of the day, political powers might enjoy high oil prices, as it inflates their GDP figures as it has done in the past and these countries get to run enormous levels of debt because of it. Inevitably it is the population and those living close to the breadline who suffer the most, not the policymakers and politicians. However, apart from the socio-economic issues associated with the manipulation of oil prices, there’s another element which is renewable energy sources.

At the end of the day, high costs are what is preventing the world from moving over from fossil fuels to renewable energy sources. Oil producers and merchants don’t benefit from unrealistically high oil prices as their short-term increase in margins will not prevent the world from shifting over to alternative fuel sources as the price of Oil continues to rise.

This means that your portfolio might be much more exposed to the risk of global inflation than you might think as most industries if not almost every industry requires some form of fossil fuel to conduct their day-to-day operations. Better be protected or else you will be in for a wild ride!

See a qualified and experience Financial Advisor

If you would like to protect your portfolio against inflation it can be useful to see a qualified and accredited Financial Advisor before doing so. If you are investing funds that you have future requirements for it would always be to your advantage to get an opinion from a professional or from a seasoned person within the industry.

Visit our website to see how we can help you with structuring an efficient, well-suited investment plan that will help you reach your future investment goals!

Who are we?

Caveat Capital Management is a strategic advisory firm based in Cape Town. Caveat Capital Management specializes in structuring tailor-made investment portfolios that serve your needs now and grow with you as your needs change. Caveat works to maximize your gains and minimize the risk.

What we offer

Caveat Capital Management has a competitive fee structure that incentivizes the portfolio manager to perform and the remuneration is highly linked to the performance of the portfolio. Caveat Capital MGMT (Pty) Ltd is a CATII – Authorized Financial Services Provider (FSP no. 24777) registered at the South African Financial Services Conduct Authority (FSCA). Meaning that we have the required licensing to structure full-discretionary portfolios structured to your needs.

Disclaimer

This report does not guarantee the suitability or potential value of any information or particular investment source. The information provided is not intended to, nor does it constitute financial, tax, legal, investment or other advice. Before making any decision or taking any action regarding your finances, you should consult a qualified financial adviser. Nothing contained in this publication constitutes a solicitation, recommendation, endorsement or offer by Caveat Capital Management, but is merely an invitation to do business.

Information and content

The information in and content of this publication are provided by Caveat Capital Management as general information about the company and its products and services. Caveat Capital Management does not guarantee the suitability or potential value of any information or particular investment source. The information provided is not intended to, nor does it constitute financial, tax, legal, investment or other advice. Before making any decision or taking any action regarding your finances, you should consult a qualified financial adviser. Nothing contained in this publication constitutes a solicitation, recommendation, endorsement or offer by Caveat Capital Management, but is merely an invitation to do business.

Caveat Capital Management has taken and will continue to take care that all information provided, in so far as this is under its control, is true and correct. However, Caveat Capital Management shall not be responsible for and therefore disclaims any liability for any loss, liability, damage (whether direct or consequential) or expense of any nature whatsoever which may be suffered as a result of or which may be attributable, directly or indirectly, to the use of or reliance upon any information provided. Past performance is not an indication of future performance. Caveat Capital Management does not provide any guarantee regarding capital or performance.

Caveat Capital MGMT (Pty) Ltd is a CATII – Authorized Financial Services Provider (FSP no. 24777) registered at the South African Financial Services Conduct Authority (FSCA).