Investments for Q4 2026

High bond rates and high inflation seems likely. We have high rates of borrowing. Most bonds, equities and interest-paying funds will not do very well if this escalates.

In these circumstances, it make sense to diversify away from over-valued US stocks such as tech stocks and invest more in essential commodities that must be bought by everyone, no matter how much they cost (such as energy or toilet rolls!).

Companies that hold their value during inflation

The world cannot do without money, somewhere to live, food and energy...

• Gold and mining companies
• Real estate
• Dividend paying companies (defensive staples)
• Energy and pipeline companies
• Inflation protected bonds (TIPS, Ibonds)

If this starts to climb, US inflation may be serious.

Banks normally do well when governments start printing money, but if things get very bad and debts are defaulted on, banks can suffer. i.e. Banks like to lend money at high interest rates as long as people can pay those rates!

My Portfolio Holdings

I already hold some gold and mining stocks. I am not keen on holding Real Estate as property prices tend to go down when money is tight and returns are not exciting. TIPS, etc. are safe but again returns aren't brilliant. This leaves me with dividend companies (those that produce staple products), finance and energy companies.

Since I have high exposure to the USA already via global Index ETFs, I want to avoid the USD as much as possible and just look at the UK/European stocks.

I already have an exposure in my ISA to EU Banks via the BNKE ETF which is an accumulating ETF. However, as I need to invest within my Invest GIA account and it will be for a relatively long term (12+ months), I want to look at only distributing ETFs.

Here is my shortlist...

So I am looking at buying both OIGS and EXV6 (not too much overlap). If I want to invest more into EU banks then EXX1 would be a suitable distributing fund within my GIA, although I may sell some more tech stocks within my ISA and buy more BNKE too. 

At present, I am not 100% sure that severe USD inflation is on the cards and I think (hope) that USA Tech stocks still have a way to go as their Q3 reports were not terrible. The Iran situation seems to be escalating and the price of oil is rising but pure oil/gas stocks/ETFs are a bit too volatile for me.

My plan is to take profits where possible over the next few months (especially inside my ISA) and get ready to invest in energy and EU banks in a controlled manner (e.g. 3 big lumps over the next month or two). If the Iran situation continues to escalate, I will purchase OIGS and EXV6 and keep an eye on BNKE/EXX1 movements.

For some support, I also asked ChatGPT (not sure if I agree however as I think USD will weaken and GBP hedged US ETFs may be better)..

Note: None of this is investment advice. This blog just helps me to consolidate my thinking (such as it is) and allows me to look back in a year or two to see why I went wrong and why (or if I got it right).