We are now in the last two weeks of August, and investors need to be cautious this time of year. In the summer doldrums, though the noise and headlines remain loud, they are often overstated. This article is another cautionary tale to not read too much into this market's conflicting cross currents.
There is a lot of talk about rates moving up, U.S. deficit challenges, inflationary pressures, and more. But as I wrote in this column two weeks ago, I don't think recent inflationary readings are enough to justify the start of a tightening cycle.
The point of this article is to illustrate that this secular bull market is ongoing and is not being threatened by higher rates or some great rotation out of growth. It's becoming more widespread with participation from leading equities in sectors other than tech and energy.
Currently, we are 2X the weighting in energy in our growth portfolio and almost 3X the weighting in our equity income portfolio. As we prepare to rebalance and reallocate our equity portfolios for our investors with the goal of providing alpha, we need to look beyond the MAG7 and hyperscalers for the leading fundamental and technical stocks within the other nine sectors.
