How to survive the rising rates environment

Interest rates have risen in Australia for the first time since 2010, which has been a long time coming, if anything we are late to the party.

Rate announcements and central bank meetings are usually followed by a week of increased volatility – we have certainly seen that so far.

With stocks and bonds on such unstable ground as of late, many investors have been fearing that central banks, in their attempts to dampen inflation, may inadvertently tip the economy into recession. 

We expect continued sharp corrections in the stock market where money will begin flowing and transitioning back more proportionately towards value stocks than we have seen over the last few years.

Expect investors to head especially towards staples like the big miners and defensive stocks that have fared relatively well in the current economic environment. 

The state of the current market raises a lot of questions in the near term. The best way to keep an eye on what’s next is to watch the bond market for future rate expectations, and listen closely to any updates from the Federal Open Market Committee (FOMC) and the RBA.

We talk about all of this and more in our latest podcast which is available below.

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