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 began raising rates in March of 2022. We expect the Fed to get much more aggressive with raising rates as they combat inflation.
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 aggressively raises rates.
Clients, talk with your financial advisor about getting a “second opinion” on all of your financial assets. Have your financial plan up-to-date, and make sure your allocation meets your needs (risk and return).
If you aren’t a client of Polaris Wealth, take advantage of our complimentary financial planning. It’s free of cost or obligation of working with us. Coordinate with your Schwab financial consultant to schedule a meeting.
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