The markets are resilient. Federal monetary policy is poised to begin helping tame inflation. And this may be a solid time to consider increasing investments in equities while perhaps limiting exposure to certain bonds.
Those are among key insights from Regions Chief Investment Officer Alan McKnight, who joined Courtney Reagan on the Feb. 16, 2022, edition of CNBC’s Worldwide Exchange. McKnight discussed in conversational detail his latest insights on market activity and what investors should watch.
Despite inflation, including producer price inflation and consumer price inflation, the markets are doing well, largely due to the strength of earnings season, McKnight said.
“Even though we’ve seen a decline this year with the S&P down about 6½%, there is still an underlying theme of optimism in the markets, if we can get through some challenging issues as it relates to monetary policy and inflation,” McKnight added.
Further, McKnight believes the expected slow progression of interest rate increases should help keep markets steady.
“It’s a delicate balance to keep from going too far, too fast,” McKnight said. “We are confident there will be continued increases over the course of the year, but we don’t think the Federal Reserve will go too fast in raising rates.”
For investors, McKnight’s view is that it’s important to be overweight in equities, despite the risks of inflation and other challenges.
“We think investors should focus on adding to equities instead of bonds. It is a challenging time for bond investors to generate the returns needed,” he explained.
Additional insights from McKnight’s interview can be seen in the video from CNBC below.
Regions Wealth Management offers customized financial insights for clients. To connect directly with a Regions professional about your individual questions and goals, click here.
For more market insights, McKnight and Regions’ team of investment professionals offer a weekly commentary for investors here.
Alan McKnight is the Chief Investment Officer for Regions Asset Management, part of Regions Bank Wealth Management where he is responsible for developing consistent and comprehensive asset management strategies to meet the needs of individuals, families and institutional clients.
The commentary expressed are statements of the individual’s opinion, are intended only for informational purposes, and are not formal or binding opinions of Regions Bank, its parent company Regions Financial Corporation, or its subsidiaries. This content is solely for information and educational purposes, and nothing contained in this presentation constitutes an offer or solicitation to purchase any security, the recommendation of any particular security or strategy or a complete analysis of any security, company or industry or constitutes tax, accounting or legal advice. Information is based on sources believed to be reliable but is not guaranteed as to accuracy. Commentary and opinions provided reflect the judgment of the individual as of the date of the statement and are subject to change without notice. Some statements may contain forward-looking statements based upon the reasonable expectations, estimates, projections and assumptions of the individual, but forward-looking statements are not guarantees of future performance and involve risks and uncertainties, which are difficult to predict. Investment ideas and strategies presented may not be suitable for all investors. No responsibility or liability is assumed for any loss that may directly or indirectly result from use of information, commentary or opinions.