We expect to see value win the “tug-of-war” for leadership between growth companies and value companies. Value has historically outperformed growth during rising rate environments which has a greater impact on growth company profit margins.
We believe that the labor shortage will continue to impact our supply chain and impact inflation. The Fed will begin raising rates as early as March or April of 2022. They will take a cautious approach leading to inflation over a longer time period.
Pay attention to the valuation of your stocks, as it will be very hard to outperform the market with a portfolio full of overvalued companies.
We continue to “pound the table” about underweighting or even eliminating your bond allocation. Bondprices will be under pressure for years as the Fed tapers bond purchasing and eventually begins raising rates.
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