As we begin Q4 of\n2021, we look at key factors in today\u2019s Steady Investor that we believe are\ncurrently impacting the market, such as:<\/p>\n\n\n\n
What Does the Fed\n\u201cTaper\u201d Mean for Markets? \u2013 <\/strong>In a\nhighly anticipated move, the Federal Reserve announced this week that it would\nbegin unwinding (often referred to as \u201ctapering\u201d) its $120 billion monthly bond\nand mortgage security purchases. In the aftermath of the Great Recession and\nthe early months of the pandemic, the Fed implemented these monthly purchases\nto stimulate demand for long-duration bonds and mortgage securities, which has\nthe effect of keeping upward pressure on prices and downward pressure on\ninterest rates associated with the debt. The Fed\u2019s actions are designed to keep\nborrowing costs low, which theoretically stimulates economic activity. But\nmanufacturing low, risk-free interest rates also nudges investors towards areas\nof the market where they can generate yield, which is a significant reason\nequity markets have seen such sustained inflows. The question many investors\nare asking now is, will the Fed taper put upward pressure on interest rates\nover time, thereby reducing the relative attractiveness of stocks? <\/em>The\nanswer might be yes if we expected long duration Treasury bond yields to shoot\nhigher as the Fed trimmed bond and mortgage security purchases, but we do not\nexpect that to be the case. The Fed is intentionally winding down its programs\nslowly, while widely telegraphing its plans to the market. As for as interest\nrate increases, we may not see any moves to the fed funds rate for a year or\nlonger. In other words, the taper and associated tightening are poised to\nhappen very slowly, which should give the markets ample time to adjust. When\nFederal Reserve Chairman Jerome Powell announced the taper, stocks climbed to\nan all-time high.1<\/sup><\/p>\n\n\n\n _____________________________________________________________________________<\/p>\n\n\n\n Where Should You Invest Your Retirement this Time of the Year?<\/a><\/strong> Are you planning your retirement or having thoughts about getting prepared? If so, it\u2019s important to be able to generate income from your retirement investments and avoid risk. <\/p>\n\n\n\n You may not know where to invest and cash won\u2019t\ndo, but a portfolio invested in stocks with a strong track record of dividends\nand dividend growth may give retirees the potential for a stable and\npredictable source of income.<\/p>\n\n\n\n To learn more about how to use dividend-paying stocks in your strategy to potentially generate cash flow for retirement, check out our guide, \u201cRetirement\u2019s Uphill Battle: Generating Income in a Low-Interest Rate Environment.\u201d _____________________________________________________________________________<\/p>\n\n\n\n One Key Reason the\nTaper May Not Lead to Surging Interest Rates \u2013 <\/strong>While the Fed tapers and reduces artificial demand for long-duration\nbonds and mortgage securities, demand for U.S. debt may continue apace from\nabroad. In surveying the world of \u2018risk-free\u2019 debt, German 10-year bond yields\nare essentially zero, at 0.07%. French, Irish, Dutch, and Swiss yields are also\nhovering at the zero bound. All told, there is approximately $10 trillion in\nnegative-yielding global debt, meaning investors need to pay money to own those\nbonds. By comparison, long-duration U.S. Treasuries likely continue to look\nattractive to global investors, and continued demand can keep upward pressure\non price and downward pressure on yields.3<\/sup><\/p>\n\n\n\n The Beneficiaries of\nSupply Chain Problems \u2013 <\/strong>Problems\nassociated with snarled supply chains have a steady presence in headlines\ntoday: rising input costs, jammed ports, higher prices for consumers, items\nmissing from the shelves, and delayed delivery times. Retailers and consumers\nare feeling some difficulties and frustrations, but some companies are reaping\nbig benefits from these global supply strains: shipping and trucking companies.\nJammed ports and sustained demand have pushed up ocean freight rates to near-record\nlevels, which is funneling through to shipping companies in the form of higher\nprofits. A.P. Moeller Maersk, one of the world\u2019s largest shipping companies,\nposted a Q3 profit of $5.44 billion, which is more than five times what it\ngenerated in the same quarter last year. That\u2019s also more profit than UPS or\nAmazon posted for the quarter. Trucking companies are benefitting as well \u2013\nSchneider National, which is a trucking company based in Wisconsin, saw net\nincome of $110 million and set an all-time record for earnings-per-share in Q3.4<\/sup><\/p>\n\n\n\n Generating Income in Your Retirement – <\/strong>You still may\nbe wondering where to invest during these unprecedented times, as cash won\u2019t\ndo. We would suggest considering stocks that are growing earnings and dividends\nand have a track record of doing so.<\/p>\n\n\n\n To learn more about how to use dividend-paying stocks in\nyour strategy to potentially generate cash flow for retirement, check out our\nguide, \u201cRetirement\u2019s Uphill Battle: Generating Income in a Low-Interest Rate\nEnvironment.5<\/sup>\u201d<\/p>\n\n\n\n If you have $500,000 or more to invest, click on the link\nbelow to get our free guide today!<\/p>\n","protected":false},"excerpt":{"rendered":" Fed announces taper, what it means for the markets, who is benefiting from supply chain problems<\/p>\n","protected":false},"author":3,"featured_media":7426,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[71,73],"tags":[],"class_list":["post-9972","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-private-client-group","category-steady-investors-week"],"acf":[],"_links":{"self":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/9972","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/comments?post=9972"}],"version-history":[{"count":1,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/9972\/revisions"}],"predecessor-version":[{"id":10264,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/9972\/revisions\/10264"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/"}],"wp:attachment":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/media?parent=9972"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/categories?post=9972"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/tags?post=9972"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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If you have $500,000 or more to invest, click on the link below to get our free guide today!
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Retirement\u2019s Uphill Battle: Generating Income in a Low-Interest Rate Environment.<\/a>2<\/a><\/sup><\/strong><\/p>\n\n\n\n