Lawrence Ullman is the chief executive of Ullman Wealth Management Inc., which provides private capital-management services to high-net-worth individuals, endowments, charities and foundations.
Indeed, what is an equity investor to do knowing that certain formidable headwinds remain? The Fed is raising interest rates in the midst of an extended and richly valued equity market. The S&P 500 trades at an This scenario may not be far-fetched – bond investors have been acting more concerned, with two-year Treasury yields recently reaching 16-year highs, spurred in part by strong jobs data. After many years of meagre yields, investors now have an alternative. As a result, surging yields may pressure investors to adjust equity allocations, away from growth sectors in particular.
Considering the material and abrupt pivot toward increased risk appetite over the past six months, investors are now increasingly asking the question of how to protect their portfolios in the context of global central-bank tightening and continued increases in policy interest rates. It may be time to consider some more defensive strategies.