Kevin O'Leary discusses his investment strategy in a rising inflation environment, stating that "dull" investments are currently in vogue.

Investors are cautious at the start of the year due to increasing rates and inflation.

The stock market has dropped 6% in January, on track for its worst month since March 2020 when the coronavirus pandemic and lockdowns hit the United States, while the bond market has surged above 1.8%.

O'Shares chairman and entrepreneur Kevin O'Leary offers some guidelines for investing in a rising interest rate climate.

During inflationary periods, it becomes crucial to prioritize quality. Cash flow, dividend distributions, and sectors with pricing power are all essential factors to consider.

To achieve success in investing, it is crucial to diversify across various sectors, rather than focusing solely on one sector, such as technology, which may have inflated valuations.

He emphasized the importance of selecting an ETF with sector diversity, particularly in sectors with strong pricing power, when using it.

O'Leary is employing his ETF as a safeguard against inflation, with its primary components being , , , and .

O'Leary stated that the ETF is designed to hold high-quality stocks from the S&P index, following specific rules that prioritize companies with pricing power and strong performance in inflationary times. Consumable goods are indeed paid for in inflationary times, as people need to eat, buy healthcare products, and perform daily activities, despite the ability of these companies to increase prices as inflation rises.

The OUSA ETF has experienced a smaller decline compared to the broader market sell-off, with a 2% drop this week compared to the S&P 500's nearly 4% fall.

In this environment, O'Leary emphasizes the importance of high-quality and high-dividend stocks, but he also looks for another specific attribute.

He said, "I enjoy big and boring cash flows because they reduce portfolio volatility, especially during challenging times. That's the purpose of OUSA."