Salem Salem Abraham, a 34-year-old market veteran, may not have heard his name, but his flagship mutual fund, Abraham Fortress fund, has surpassed 96 per cent of its peers so far in 2022, according to Morningstar.

It is hard to imagine that his investment management company is 2500 kilometers away from Wall Street, and the nearest company, Starbucks Corp, has to drive 70 kilometers. In such a remote place with a population of less than 3000, Abraham grew up and raised his eight children.

How did Abraham succeed in resisting risks? What kind of investment philosophy does he have and which targets are he optimistic about?

Dealing with recession through diversified allocation

Abraham claims to be a math geek with decades of experience managing hedge funds and trading futures. His investment motto can be summed up in one sentence:

"always consider downside risks. "

Risk comes first, so Abraham gives priority to diversifying to limit risk, which is why he sleeps soundly in the face of a market crash.

So far this year, the Abraham fortress fund is down just 0.5%, while the s & p 500 and the Nasdaq composite index are down 16.2% and 25.4%, respectively.

This is how Abraham describes his investment style and uses an example to explain the importance of diversified investment allocation:

It's like wearing a seat belt, you never know what will happen in the next second of the journey, but I will fasten my seat belt to make sure that the airbag in the car can be used properly and won't drive too fast.

Imagine that investment is a coin flip. When the coin is flipped, investors make money 60% of the time and lose money 40% of the time. If you flip a coin, there is a 60% chance of being profitable. If you flip 100 coins with the same 60 plus or minus 40, you can make money about 98% of the time, because downside risks are minimized over time.

The conclusion from this example is that it is best to hold many small positions in a portfolio rather than a few large positions-even if the prospects for large investments are good.

In the decades since Nobel laureate Harry Markowitz advocated diversified investment strategies, it has been widely regarded as one of the few unthinkable investment strategies. But Abraham says that while this is common sense, it is not very common in practice:

What amuses me is that when some investors hold diversified stocks, they think they are diversified.

For example, if you ask me to make a fruit salad, and I bring an Apple Inc salad with 20 cuts and practices to your house and tell you that this is a fruit salad, you will only think it is an Apple Inc salad, not a fruit salad.

Abraham's view is that holding stocks with cross-industry or market capitalization of different sizes-such as growth and value stocks or large-cap stocks and small-cap stocks-is not really diversified, because in an economic downturn, stocks "dive" together, as happened this year.

He also believes that this round of selling pressure will not disappear soon and will continue for some time.

Even so, Abraham still believes that stocks are an important part of the portfolio, saying that there is no alternative to stocks and that lower-risk assets such as bonds are to some extent worth investing in.

If you are worried about the stock market, it may just be because your position in the stock market is too heavy.

The four most promising opportunities in the stock market

Abraham saidAirlines, oil and gas companies and utilities, plus select blue-chip technology stocksIt is a good opportunity for him.

In his view, the logic of airline investment is simple: TSA throughput data prove that the airline industry is recovering. As summer approaches, passenger numbers have returned to more than 90 per cent of pre-outbreak levels. In addition, high oil prices, which hurt airlines' profitability, have been reflected in share prices:

In the next six months, I think airlines will really take off-both literally and in terms of stock prices.

In addition, he believes that energy stocks, especially in the oil and gas industry, have more room to rise because supply will fall short of demand for several years.

Similarly, the demand for energy provided by utilities, such as electricity, is inelastic, which means that such demand will not disappear even if the economy goes into recession.

While utility stories are not attractive at all, they are a simple, serious way to invest in stocks to protect portfolios from soaring energy prices without taking too much risk.

They are good hedges against inflation, with good returns and less frenzied ups and downs.

Finally, Abraham also mentioned his heavy stocks:$Apple Inc (AAPL.US) $、$Microsoft Corp (MSFT.US) $、$Alphabet Inc-CL C-A (GOOGL.US) $和$Amazon.Com Inc (AMZN.US) $Waiting for blue-chip tech giants. He says he likes not only these companies, but also because they are the core components of the S & P 500.

Based on the three industries that Abraham is optimistic about, Futu Information has sorted out the ETF and some star stocks of the following related industries for investors' reference:

• Aviation:

Air ETF-U.S. Global (JETS.US) $

$Delta Airlines (DAL.US) $

American Airlines (AAL.US) $

Southwest Airlines (LUV.US) $

United Continental Airlines (UAL.US) $

$Spirit Airlines (SAVE.US) $

$JetBlue (JBLU.US) $

• Oil and gas:

S & P Oil and Gas production Index ETF-SPDR (XOP.US) $

$Western Oil (OXY.US) $

$Devon Energy (DVN.US) $

$ConocoPhillips (COP.US) $

$Marathon Oil (MRO.US) $

$EQT Energy (EQT.US) $

$Exxon Mobil Corp (XOM.US) $

$Chevron Corp (CVX.US) $

$Equinor (EQNR.US) $

• Public utilities:

Selected Public Utilities Industry Index ETF-SPDR (XLU.US) $

$NextEra Energy Inc (NEE.US) $

$Constellation Energy (CEG.US) $

$Brazilian Electric Power (EBR.US) $

$Sampra Energy (SRE.US) $

$Exron Power (EXC.US) $

$midpoint Energy (CNP.US) $