![]() ![]() I see room for opportunity along the entire supply chain, including manufacturers, battery producers, and suppliers. We at iShares® like investments that offer exposure to a full breadth of potentially benefitted sectors. Investors looking to capitalize on the Inflation Reduction Act can consider pure-play exchange-traded funds (aka ETFs) that provide exposure to the clean energy and electric vehicle value chains. We may also see electric vehicle growth following tax cuts and direct investments within the package. The efficient energy, agriculture, and infrastructure sectors are all poised to benefit from this sweeping legislation. “The Inflation Reduction Act delivers over $370 billion of funding to areas such as clean energy and sustainable infrastructure. And while this is not going to help bring inflation down in the near term, it could help speed up a transition to more sustainable energy sources.” Does the passing of the Inflation Reduction Act position any particular industries or sectors for success? Should investors adjust their portfolios accordingly? It focuses on additional clean energy and infrastructure investment. The Inflation Reduction Act, which President Biden signed into law in August, could also shake things up. That could be one reason things remain volatile. We are not in a recession yet, but we at BlackRock believe that if the Fed keeps moving interest rates higher, we could go into one next year. Honestly, no one knows just yet, but economic indicators like the strength of the job market, the strength of the consumer (hint: you), and the condition of the manufacturing sector can clue us in. I get asked all the time how likely we are to experience a recession. Meaning, it’s possible that the Fed’s moves could engineer a recession. But while more aggressive monetary policy could lower inflation on one hand, it could further stall US economic growth on the other. And markets continue to brace for higher interest rates. In fact, they’ve already delivered five consecutive rate hikes this year, including three ‘jumbo’ hikes of 0.75% in June, July, and September. To help fight inflation, the Federal Reserve has committed to raising interest rates. Even as we see the recent ease in energy prices, inflation may stick around because of other economic factors like a resilient labor market and hot housing market. Every single subcategory within core goods ticked higher. The August Consumer Price Index report stunned markets on Tuesday September 16, showing a still-rapid pace of inflation increase. Varied exposures can help mitigate losses and offer potential protection.” Can you Skimm a few conditions and events that are moving the markets? ![]() It’s also important to keep your portfolio diversified during periods of uncertainty like this. I especially like shorter dated, inflation-protected bonds and high dividend-paying assets. I favor a defensive stance moving forward. Remember: No one has a crystal ball that can help them time the bottom. Market volatility isn’t unique, and we cannot control it - but we can control our reaction to it. But then I missed out on the significant market bounce-back that came next. I felt panicked by the uncertainty, and thought it was the safest option. Personally, the biggest financial mistake I’ve ever made was cashing out at the bottom of the financial crisis of 2008. Over the last 20 years, 24 of the 25 best days in the market occurred within one month of one of the 25 worst days.* Staying invested during rough patches can help investors stay on track for pursuing their long-term goals. ![]()
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