Bank of America’s chief equity strategist is concerned about S&P earnings declining. When that happens, the S&P 500 tends to go into a secular bear market.
But retirees need income. That’s 100% the name of the game. Bonds absolutely play a role in generating income, but most people don’t understand how they fit into an investment strategy.
Elevated levels of inflation should prevent the Fed from easing rates aggressively, even if a recession takes hold.
Although markets continue to trade on the possibility of a Fed “pivot” away from rate hikes, the central bank is likely to continue raising rates and then hold rates in restrictive territory throughout 2023, waiting for the long and variable lags of monetary policy tightening to feed through into the economy.
Put simply, the Fed’s view on rates has shifted from “lower for longer” – which is what we saw for many, many years – to “higher for longer.”
That means it’s time to consider a new portfolio playbook.
Investors can seek to generate income while maintaining the relative safety of cash-like investments through ultra-short-duration securities.
Want help allocating your portfolio for these new market realities? Visit us at Blue Marlin Advisor. https://www.bluemarlinadvisor.com/
