Live from the Bloomberg Sustainable Business Summit
Oct 5, 2023
auto_awesome
Gideon Maltz discusses refugee employment. Todd McKinnon talks about cyber attacks. Renee Johnson reports on middle-aged binge drinking. Alan Lancz discusses current economic challenges.
Investors are realizing that interest rates will likely remain high, resulting in a revaluation of the markets.
With the expectation of higher interest rates, investors are raising cash and seeking alternatives like money market funds offering yields over 5%.
Deep dives
Investors React to Higher Interest Rates
Investors are realizing that interest rates will likely remain high for a while, resulting in a revaluation of the markets. The initial euphoria around lower interest rates has faded as investors now understand that rates are not likely to decrease significantly in the near future. This realization has led to a shift in valuation and a need for investors to adjust their expectations accordingly.
Cash Allocation and Investment Strategy
With the expectation of higher interest rates in the market, investors have been raising cash and seeking alternatives for their investments. One option investors are considering is money market funds, which offer yields over 5%. Additionally, some investors are locking in higher rates through certificates of deposit (CDs) or short-term treasuries. This approach allows them to take advantage of the current interest rate environment while maintaining liquidity and stability in their portfolios.
Opportunities for Value Investors
The current market conditions have created opportunities for value investors to accumulate quality companies with strong balance sheets. Boring companies that are less reliant on the capital market are becoming more attractive due to their stability and reliable dividends. Companies such as US Bank, Bristol Myers, and Medtronic offer attractive dividends and are currently trading at lower valuations.
Gradual Approach to Investing in a Higher Rate Environment
Investors should consider a gradual approach to investing in the current higher rate environment. While the market may experience fluctuations, it is important to stay focused on long-term value and opportunities. As interest rates remain higher for an extended period, investors should be prepared for a more challenging environment, with potential economic slowdowns and increased volatility.
Gideon Maltz, CEO at Tent Partnership for Refugees, discusses tackling the migrant crisis with jobs. Okta CEO Todd McKinnon talks about providing security for businesses and managing cyber hacks. Renee Johnson, Associate Professor of Mental Health at the Johns Hopkins Bloomberg School of Public Health, reports on the rise in binge drinking and drug use among people ages 35-50. And we Drive to the Close with Alan Lancz, Research Director at www.LanczGlobal.com. Hosts: Carol Massar and Tim Stenovec. Producer: Paul Brennan.