Concerns over record-high inflation, ongoing geopolitical issues, and the Federal Reserve’s signal that it will hike interest rates four to five times this year have caused the stock market to suffer frequent sell-offs this month, with major benchmark indexes struggling to regain strength. Therefore, we think investors looking to dodge these short-term fluctuations could bet on stocks that are well-positioned to capitalize on the economy’s growth in the long run.
Along with a bipartisan infrastructure bill, impressive fourth-quarter U.S. GDP growth paints a bright economic outlook. So, growth-focused companies should benefit significantly eventually. Investors’ interest in growth stocks is evident in the iShares Russell Top 200 Growth ETF’s (IWY) 7.9% returns over the past nine months versus the SPDR S&P 500 Trust ETF’s (SPY) 5.9% gains.
