BCA Weekly Commentary 3/19/21: Economic Growth Euphoria
SUMMARY. The past 2 weeks little has changed in financial markets other than shifts from value stocks tied to the economy & stimulus and growth (ie technology) declining in response to rising interest rates. The economic euphoria in regards to growth may have peaked with the passing of the stimulus as doubt maybe beginning to reap its head on pace of growth. The condition of individual's financial situation maybe more dire than most suspect limiting the amount of stimulus that will be spent on items that actually growth the economy.
INVESTMENT IMPACT. As per prior notes, the effect of rising interest rates on a leveraged or highly indebted economy may tend offset the very stimulus that is intended to create growth. The reality of this maybe beginning to seep in marking the peak in the rise of interest rates and moderating growth & inflation expectations going into 2022 especially. As a result, we shifted some model allocations away from value (ie those directly tied to fate of US economy) to growth stocks which have recently underperformed. Cash/bond allocations remain only slightly elevated in growth portfolios.....
Our model portfolio performance has been updated on our website as of 2/28/21.
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