The three risks for investors to hedge today

Investors currently have three risks to hedge: The risk of a slowdown in growth ; The risk of inflation; The risk of a rise in interest rates. We believe nominal interest rates will rise faster than expected long-term inflation, so real interest rates will rise. Investors should therefore look for assets that provide an income that increases faster than inflation, which offsets rising real interest rates and prevents a fall in the ir prices. The income provided by these assets must also not be cyclical, so that they hedge against a slowdown in growth. These conditions rule out: Of course nominal bonds; Assets linked to credit risk (whose returns are cyclical due to defaults); Equities (dividends are overindexed to prices, but are cyclical); Real estate (rents are underindexed to prices). Few asset classes remain: some infrastructure (green energy production), private equity (valuations are smoothed) and of course inflation-indexed bonds.