Last year, the broader equity indexes witnessed their worst performances since 2008, with an inflation-driven market rout. Despite this, the Fed has vowed to stay adamant with its aggressive stance to quell inflation, taking the ‘terminal rate’ to a target range of 5-5.25%, exacerbating fears of a global recession.
Moreover, this environment has triggered a shift from growth stocks to value stocks as investors seek shelter in high-quality businesses with strong fundamentals and low share prices. Additionally, since value stocks tend to be low-volatility investments, they can provide stability for portfolios during market downturns while still offering potential upside when markets rebound.
