Investors Face a World Where Stocks No Longer Reign

For many years after the 2008-09 financial crisis, interest rates were so low that many investors argued that to get a decent return you had to put a large portion of your portfolio in the market. stock. That belief is so pervasive that Wall Street has given it a name: TINA, which stands for “no alternative” to stocks. Certainly, the stock market is riskier than, say, government bonds that are guaranteed to pay annual interest. But returns on stocks are so much better than practically anything else in the market that investors see few viable alternatives to placing their money.

The Federal Reserve has changed that dynamic. The central bank, determined to rein in inflation, has begun its most aggressive rate hike campaign since the 1980s. Investors expect the Fed to raise interest rates to around 3% by early 2023 from where they were. near zero by early 2022. As a result, once-favorites have fallen to multi-year lows. Investors Face a World Where Stocks No Longer Reign

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