DBS Bank Urges Investment in Scarce Assets Amid Inflation Concerns

Feb 24, 2026

81 min

Feb 24, 2026 02:30

Inflation risks rising, investors told to buy scarce assets

## Rising Inflation Concerns

DBS Bank's Chief Investment Officer, Hou Wey Fook, advises investors to focus on scarce assets like real estate, infrastructure, commodities, and precious metals as inflation risks increase. This recommendation comes as long-term inflation expectations in the US and Europe rise, with forecasts suggesting elevated inflation levels for the foreseeable future.

## Scarce Assets as a Hedge

Hou highlights that scarce assets, characterized by limited supply and demand imbalances, tend to perform well when inflation rises and real yields decline. He suggests that these assets should become core components of investment portfolios, rather than just defensive additions.

## Structural Inflation Shift

The global inflation landscape is undergoing a structural change, moving away from being driven by temporary factors. Market indicators support this view, with rising inflation expectations and predictions of sustained inflation through the decade.

## Liquidity and Market Risks

Despite abundant liquidity, markets have not fully accounted for long-term risks associated with rising government debt and fiscal deficits. Hou warns that continued loose fiscal policy could lead to market adjustments, affecting credit spreads and equity valuations.

## Diversification and Currency Stability

Hou recommends a diversified investment approach across various scarce assets to enhance portfolio resilience. For UAE investors, the dirham's peg to the US dollar offers stability, reducing the need for currency hedging and allowing portfolios to focus on corporate fundamentals.

## Cash Holdings and Investment Strategy

Many investors are holding excessive cash, which risks losing value in an inflationary environment. Hou advocates for a balanced strategy that includes income-generating bonds, growth equities, and diversifying assets like gold to navigate the complex global investment landscape.

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