As interest rates potentially come down, driven by the Federal Reserve, the landscape for investors is shifting. In this episode of The Wealth Enterprise Briefing, managing partner Michael Zeuner and senior investment manager Sam Sudame continue their series on the implications of a steeper yield curve, discussing how it could impact equity investors.

Key insights discussed:

Lower interest rates reduce the cost of capital, encouraging business investment.
Value sectors like industrials, materials, and real estate should benefit.
Small and mid-cap stocks could outperform due to lower rates boosting earnings.
A domestic U.S. focus supports small and mid-cap growth.

Sam explains that the dominance of tech and growth stocks may give way to value stocks, as modest inflation and higher growth favor sectors that previously underperformed.

Additionally, Sam recommends investors consider diversifying portfolios to balance growth with value saying, "I recommend investors be better diversified. Keep a balance between value and growth and have allocations to not just large caps but mid-caps and small caps to have a more holistic equity allocation."

Missed the previous episode on the yield curve's implications on fixed-income strategy? Tune in here.

As always, if you have any questions or need further insights into your investment strategy, please don’t hesitate to contact us.

Important Information:

This podcast contains our current opinions and commentary that are subject to change without notice. Our commentary is distributed for informational and educational purposes only and does not consider the specific investment objective, financial situation, or particular needs of any recipient. Information contained herein has been obtained from sources we believe to be reliable, but we do not guarantee its completeness or accuracy. The information contained herein does not constitute legal or tax advice to any person. Please consult with your legal or tax advisor regarding any implications of the information presented in this presentation.

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