This month, Jason Weaver discusses the barbell stock strategy, active vs passive bonds, and the Federal Reserve brake pedal.
Barbell Stock Strategy
Bringing 2 different stock strategies together within a portfolio
Value
Benefit from reopening dynamic
More money today or high dividend payouts in high inflation environment
Growth/Quality Stocks
Quality companies with pricing power
Strong Balance Sheets
Resilient cash flow
Active vs. Passive Bonds
Rising rates can create downward price pressure on fixed income portfolios
Core bond portfolios invest primarily in investment-grade and rate sensitive fixed income
Multisector bond portfolios seek income by investing among several fixed-income sectors
Non-rated
High yield
Managed duration
Federal Reserve Brake Pedal
The Fed’s “brake pedal” refers to their ability to slowdown the economy
Increase Interest Rates
Reduce Bond Purchases
The Fed recognizes that inflation is here
Rather than putting foot on the brake pedal, the Fed will likely “take foot of gas”
Monetary policy is still very accommodative with low rates
