2022 has been a very challenging year for investors due to the combination of a hawkish Fed and a slowing economy. The June CPI report also makes it clear that there is not going to be any immediate relief as the Fed is likely to ratchet up the hikes even at the expense of more economic pain.
One strategy for investors is to look for stocks that are insulated from economic and monetary stress. One of the sectors, with such characteristics, is defense and aerospace stocks. Their revenues are historically very stable especially as defense spending tends to consistently increase. This is, even more, the case with European countries ramping up defense spending following Russia’s invasion of Ukraine.
