Higher, Higher, and Higher
Interest rates, inflation, and commodity prices are all trending higher. This is typical of late cycles and reflective of strong economic growth. Companies that benefit from these trends ought to out-perform others as a result. These can be banks, commodity producers, and select industrial companies like equipment suppliers.
The investing environment changed this year. A new set of winners is emerging. Consequently, many of last year’s will wane.
Sector rotation, which is what this represents, is also normal as markets mature. Rotations frequently occur after corrections; today’s looks to be textbook. We have anticipated this and have prepared. We may make more changes as we identify these new opportunities. Stay steady, my friends.
El Solo Toro