Analysts at Goldman Sachs $GS urge investors to consider the stock market situation and take into account the next downturn. They say stocks may yet suffer as inflation remains elevated and they expect no surprises from the Fed. However, they are directing investors to an area where demand is well above supply and in their view this is the best asset class to own during this phase of the cycle.

The bank cautions in conjunction with equities and recommends investors focus on another area.

So what is the better alternative according to Goldman Sachs?

Global investment bank Goldman Sachs has advised investors to buy commodities.

"Buy commodities now, worry about the recession later".

Analysts at the firm including Sabine Schels, Jeffrey Currie and Damien Courvalin explained:

With oil being the commodity of last resort in an era of severe energy shortages, we believe the downturn across the oil complex provides an attractive entry point for long-term-only investments.

https://www.youtube.com/watch?v=zVjQfIRmDXg&ab_channel=CNBCTelevision

In the US, Federal Reserve Chairman Jerome Powell said last week:

"We are taking decisive and swift action to ease demand to better match supply and to keep inflation expectations anchored. We will continue to do so until we are confident that the job is done."

In addition, European Central Bank (ECB) board member Isabel Schnabel noted on Saturday that central banks around the world risk losing public confidence and must act decisively now to fight inflation even if it pulls their economies into recession.

Commodities are the best asset class to own during the late-cycle phase when demand exceeds supply.

The late-cycle phase usually involves a surge in inflationary pressures and an economy that is exceeding its maximum economic growth rate.

Currie, who heads commodities research at Goldman Sachs, believes recessions are a natural part of the long commodity supercycle. He told Reuters last November:

"We expect a structural bull market in commodities, very similar to what we saw in the 2000s or the 1970s."

https://www.youtube.com/watch?v=EaFhl9kG3_U&ab_channel=CNBCTelevision

An analyst told CNBC in June that we are at the beginning of a commodity supercycle. "This is the first change of the commodity supercycle - It's not just oil and gas, it's metals, it's mining, it's agriculture and basically all the old industries - because the sector has suffered from more than a decade of underinvestment," he said.