Voya’s Reinhard: K-Shaped Recovery Underway Will Create Equity Winners And Losers
In a piece for TheStreet’s “Retirement Daily,” Voya Financial Senior Portfolio Manager and Asset Allocation Head Barbara Reinhard writes, “We see the U.S. economy shifting into a ‘K-shaped’ recovery defined by uneven pressures that will create winners and losers with broad strokes across asset classes, sectors, and investment styles.” According to Reinhard, the Federal Open Market Committee’s adjusted longer-run inflation target, which now seeks “to achieve inflation that averages 2% over time,” along with “the Fed’s adjusted stance on ... unemployment could have longer-term implications for the ‘growth versus value’ debate in equities.” Reinhard contends that “history has shown that we need both real rates to be off their lows and inflation to be expected to pick up for value to deliver outperformance” and that “equity investors can add some value exposure to their portfolio for diversification, in case the Fed is successful and the long-standing leadership of growth stocks comes to an end.” In addition, Reinhard says “there are still opportunities to prepare portfolios today for the low-yield world ahead,” despite the dramatic stock market recovery that started in April.