One should be "cautious" in the new year when looking for investment opportunities, given that 2017 could bring significant political changes while markets also re-adapt to an environment of higher yields, an UBS strategist said.
The best way to navigate through the volatility in the new year is by "combining risks," Yianos Kontopoulos, global head of macro strategy at UBS, told CNBC on Wednesday.
"The market has priced significantly both higher growth and higher inflation starting in the U.S. and then globally. I'd say the risk reward giving what's priced in is better on the growth side as opposed to inflation. And starting from that we're looking then for places, let's call them growthy type of trades," he added, naming currencies as a "very good place to look".
Among currencies, one should be looking at those that seem to have been forgotten and haven't yet priced in the changes to a global environment of higher growth and higher inflation.