For the past ten years, with value lagging, our allocation approach has been geared more towards growth than income. We have taken a total return approach, especially when it comes to our income-dependent retirees. This year we have made significant adjustments to our strategy due to the regime change. Tech/growth took a back seat to the value play this past quarter, with value outperforming. Rising interest rates have been a major catalyst in the shift. If inflation turns out not to be transitory and sticks around longer, the high valuation companies will get hit the hardest. To prepare for this, we are favoring more value-oriented companies and liquid alternatives over the high valuation growth. Biden wants to spend $2 trillion on infrastructure and jobs. The bill will benefit industrial, clean energy, water utilities, and materials, to mention just a few. Another area we are focusing on is the housing market. Demand is there along with favorable mortgage rates, which the Fed has promised lower longer that’s if they can temper inflation. According to the 2020 generational trends report, the young and older millennials made up the largest share of home buyers since 2019, and we see that only continuing. The problem is there is no inventory to meet the demand. Supply chains have to get back on track before inventory buildup can take place. The promise of higher taxes will also create even more demand for housing in lower-tax states.
Securities offered through Raymond James Financial Services, Inc., member FINRA/SIPC. Investment advisory services are offered through Raymond James Financial Services Advisors, Inc. Fiori Financial Group is not a registered broker/dealer and is independent of Raymond James Financial Services. Branch address 205 SE 20th St Fort Lauderdale FL 33316, PH # 954-763-2600 This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Any opinions are those of the author, are as of this date, and are subject to change without notice. Past performance is not a guarantee of future results. Investing involves risk and investors may incur a profit or a loss.
