Joe Kerner on Squawk Box on a little rant today that the only thing working in the market is the oils. Everything else is just going nowhere, including his beloved GE.
Meanwhile, today's guest host Tom McManus of Banc of America Securities, gets it: Invest in the inflation hedges, eg. energy. He also likes insurance. Stay away from stocks hurt by rising rates: financials, REITS, utilities.
If there are parallels to the 70's here, which was also a time of rising inflation brought about by high oil prices, then the best performing assets may be:
Oil stocks of all kinds, gold and gold stocks, small cap stocks over large stocks.
If oil prices get out of hand, they will trigger a recession. Then you're best off in bonds, the safer the better.
If oil prices get really out of hand, they will trigger a depression. Then you're best off in government bonds (preferrably Norwegian - they have a decent amount of oil and relatively few mouths to feed- this reminds me - check if Pimco's overweight Norway, Canada in their bond funds) and cash.