The stock market is adjusting to a new chapter in the inflation story that could keep Fed policy rates higher for longer. Tighter monetary policy also rekindles questions around whether the Fed can achieve a so-called "soft landing" as it walks the line between combating inflation and preventing a recession. How can investors remain patient and view this market environment in the right context?
Global stock markets have fluctuated all year, alternating between pullbacks and recoveries that have lasted months at a time. In an environment like this, it's natural for investors to focus on stock prices and returns as markets swing back and forth. These surface-level measures are easily accessible and thus tend to draw investor attention. However, focusing on performance alone misses what really matters.
The market recovery has hit a bump due to uncertainty around interest rates and the Fed. Rates have driven markets all year with significant impacts on stock and bond prices, economic growth, the housing market, and more. In an environment like this, market expectations matter just as much, if not more, as the actual numbers, and this is reflected in the yield curve. For long-term investors, what does the yield curve suggest about economic growth and Fed policy in the years ahead?
Investing across geographies, especially when valuations are attractive, is an important way to improve diversification as the global economy recovers from recent energy and inflationary shocks. How can investors maintain perspective around international investments today?
Investors and economists have breathed a sigh of relief as new inflation data suggest that price pressures are easing. While the prices of everyday goods are still significantly higher than a year ago, some of the underlying trends are beginning to reverse. What should long-term investors focus on to stay patient and benefit from a market recovery?
As the economy slows, some investors are worried about the possibility of a recession as well as the long-term consequences of an ever-growing government debt. These concerns are timely due to recent economic data and policy decisions, including the Inflation Reduction Act making its way through Congress. How should investors react to ongoing economic and policy concerns?