What's Priced into Stocks?
With inflation raging, interest rates rising and economic growth slowing, how do investors with a long-term mindset position themselves for the post-storm environment? Similar to an actual storm that tracks across the U.S., certain areas are hit first, while others are hit last. As we enter the second half of 2022, we believe that the inflation storm has already hit and damaged many areas of the growth market, while just beginning to impact the more defensive areas of the stock market, such as value and large-cap stocks.
As a result, we are positioning portfolios in the areas of the stock market that we believe have already been impacted by the inflation storm, priced in its impact, and are now set to lead a potential growth-led recovery in stock prices.
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