3 charts show the best investments to make going into aggressive Fed rate hikes, Russia's war, and a worldwide energy shock

The era of ultra-easy monetary policy has begun to wind down, and investors are debating how to position for a series of rate hikes this year and next.

The US central bank raised its benchmark interest rate by 0.25 percentage points last week, and chairman Powell has signaled more aggressive increases are on the way. If the Fed raises rates at every meeting this year, including an expected 50 basis point hike at both its May and June meetings, that will translate into two percentage points of increases in 2022.

Markets are grappling with the aftermath of Russia's invasion of Ukraine and high energy prices, which are often associated with global recessions.

The head of research at Macro Hive told us how investors should arrange their portfolios so a big down-day wouldn't affect their investments.

Hafeez is a former head of multi-asset research and advisor to the CEO atDeutsche Bank.

When the Fed is raising rates, he broke down what Macro Hive's investment preferences are.

• Underweight bonds and equities, and overweight cash and commodities.
• Modestly long crypto (adjusted for volatility, it has underperformed less than equities)
• In US equities, overweight homebuilders, large cap value, reopening trades, semi-conductors and financials (in the medium-term), underweight large cap growth and retail.
• In European equities, overweight financials.

  Macro Hive

He believes that the allocation of coins should be made strategically.

Hafeez said that since there is much larger swings incryptocurrencies, it suggests that your positions should be smaller than your equity exposure.

When the market is in a fragile state, it is more important than ever to know when to sell. The time is now.

Hafeez said that markets have taken note of the energy price shock and the fact that bonds are down 5% to 10%. Commodities are up 39% this year.

Macro Hive

The asset classes have different price swings so returns can be adjusted on the basis of volatility.

Cash and commodities may be the best investments for Hafeez.

He said that because of low yields, cash is a wasted investment and will not beat inflation.

It is better to be flat than to lose money. Cash, along with commodities, may be the best investment in inflationary environments as cash limits your losses and allows you to survive.

This recommendation is vastly different from what hedge fund investor Ray Dalio had to say.

The chart shows that bonds are the weakest performers in the current market cycle.

Macro Hive

The long-term stock market rally will come to an end because of the Fed's monetary policy.