Airlines (19%), luxury stocks (18%) and oil (15%) were the top assets where investors are looking to reduce their exposure.
Over four in ten DIY investors have looked to increase their exposure to energy and technology amid concerns about the inflationary impact of the conflict in the Middle East.
Research from Charles Stanley Direct found that energy, technology and AI were the three areas of investment where retail investors were looking to direct their money, with 43%, 43% and 42% of those surveyed looking to increase their allocation to the three themes, respectively.
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These were closely followed by defence, gold and oil, with 41%, 41% and 40%, respectively, of DIY investors looking to add to those areas.
Telecoms, airlines and luxury were the three least popular sectors according to the survey, with just 31%, 29% and 28% of respondents looking to add to the three areas, respectively.
This comes as 84% of DIY investors polled said the current geopolitical climate in the Middle East will likely cause an uptick in global inflation. Of this, one third (33%) said it will likely lead to a significant increase in global inflation, while 51% said it will cause a slight increase.
Airlines (19%), luxury stocks (18%), and oil (15%) were the top assets where investors are looking to reduce their exposure, while gold was the asset in which the fewest respondents (9%) were looking to trim allocation.
"Oil shocks can be challenging for markets, and this time is no exception. Almost every business relies on energy in some way, whether that is powering factories, running delivery fleets or heating stores and offices," said Rob Morgan, chief investment analyst at Charles Stanley Direct.
According to the research, just over a quarter (27%) of DIY investors expect to take a high level of risk over the next three months, with around half (47%) looking to only take a moderate level of investment risk over the coming quarter.
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Morgan continued: "In portfolios there are not many hiding places from an inflationary shock of this type, the potential ones being short-term, high-quality bonds, gold and energy stocks.
"But if you are investing for the long term and have a diversified approach, it is usually best to just sit tight. Market timing – especially during geopolitical crises – is notoriously difficult. Unless your portfolio has major biases toward one sector or region, the ups and downs should be manageable."
