Balancing act Balancing act\images\insights\video\paddle-board-mountain-lake-small.jpg July 12 2022 July 12 2022

Balancing act

Finding opportunities in a rising-rate environment. 

Published July 12 2022
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Video Transcript
Question: Do you expect the Federal Reserve to guide the economy to a soft landing?
Linda Duessel: It's going to be very difficult for the Fed to give us a soft landing. In fact, we have said all along that they're going to be walking a tight rope this year. I think the Fed is aware that they're well behind the curve. They don't want to really rock the markets. And they're looking for a softish was the word that he used, Jerome Powell, softish. Sounds to me like maybe we'll get a recession, maybe we'll get a mild one.
Question: How should investors position for inflation?
Linda Duessel: How does one invest if they think inflation is a problem? If you look back in the 1970s, you saw what really worked best at that time was energy, energy stocks and real estate. And I would argue that those are two of your better choices now. Also, if you were investing for inflation and an economy that's still looking good, you might buy financial stocks, which we favor, materials and particularly dividend oriented stocks of high quality. High quality dividend stocks, truly alongside energy, financials, materials are less expensive today than they have been for much of the last 15 years.
Tags Equity . Monetary Policy . Inflation .

Views are as of the date above and are subject to change based on market conditions and other factors. These views should not be construed as a recommendation for any specific security or sector.

Investments are subject to risks and fluctuate in value. There is no guarantee that any investment approach will be successful.

There are no guarantees that dividend-paying stocks will continue to pay dividends. In addition, dividend-paying stocks may not experience the same capital appreciation potential as non-dividend-paying stocks.

Federated Equity Management Company of Pennsylvania