🇺🇸 The Fed is (not?) in control

Eagle-eyed investors | Investors go green [TOGETHER WITH]( Hi {NAME}, here's what you need to know for April 5th in 3:10 minutes. 🌱 We have a couple of days off in the UK, so we’ll be taking the opportunity to look at a few of the biggest themes in the markets this year. First up: rising interest rates and the green revolution… Today's big stories - Investors have been looking to the US Federal Reserve for clues about when they might raise interest rates… - … Luckily, there are simple ways to protect your portfolio from higher rates, says TS Lombard’s chief economist… – [Read Now]( - … And even the sobering prospect of higher rates doesn’t seem to be stopping the wave of investment in the green energy revolution Please Stand By [Please Stand By] What’s Going On Here? Investors have been on the edge of their seats as they watch the US Federal Reserve (the Fed) for any sign of a rise in [interest rates](. What Does This Mean? The US has [pumped]( huge sums of money into its economy throughout the pandemic. But now that a recovery’s officially on the cards, investors are worried the influx of cash will send product prices higher, ultimately forcing the Fed to prematurely raise interest rates to keep this [inflation]( in check. That matters: stock market valuations are eye-watering in absolute terms, sure, but not when you compare them to record-low interest rates. Higher rates, then, will make safer investments like cash and new [government bonds]( look more attractive, and riskier stocks look more expensive. So just the thought of rising rates has driven some investors to sell off both their priciest stocks and existing bonds last quarter – a trend that’s set to continue throughout the year. Why Should I Care? For markets: Watch the Fed. The rest of the world’s central banks take their cues from the Fed, which is why it’s so important to keep an eye on what it’s planning to do. Case in point: when the Fed said in March that it wasn’t expecting to tweak interest rate policy despite the country’s improving economic growth outlook, the European Central Bank and Bank of England were quick to [reassure]( investors they’re committed to low rates for the foreseeable future too. For you personally: How to protect your portfolio from rising rates. There are [three adjustments]( you can make to your portfolio to set it up for rate hikes, no matter when they happen. First, invest in cyclical and value stocks like industrials and banks, which are set to benefit from an improving economy and rising rates. Second, buy into [commodities]( like copper, since their prices tend to rise alongside inflation. And third, back the US dollar, whose value should rise in line with rates. You might also like: [Why central banks have so much power over your portfolio.]( Copy to share story: [( 🙋 [Ask a question](mailto:questions@finimize.com?body=Ask us a question: Where are you writing from? Let us know and we'll mention it when we reply.&noapp=true&subject=Please Stand By&utm_campaign=daily-global-05-04-2021&utm_source=email) 2. Analyst Take What Investors Are Getting Wrong About Interest Rates What’s Going On Here? With the coronavirus vaccine rollout well underway, the economy should slowly start getting [back to normal](. But that’ll eventually force the Federal Reserve to get interest rates “back to normal” too, which means bringing them back up from [near-zero levels](. As recently as December, most investors didn’t think that would happen for nearly four years. Now, though, they’re [penciling in 2023](. And that matters: Fed interest rates are arguably the single-most important number in financial markets, and any shift could have a pretty [significant impact on your portfolio](. Steve Blitz, chief US economist at TS Lombard, isn’t one to say he told us so, but he did tell us so: he said [in December]( that a rate rise would happen sooner rather than later. So now seems like a good time to revisit our interview with Steve, and show you what [you can do to prepare your portfolio]( before the Fed does make the shift. [Read or listen to the Insight here]( SPONSORED BY YIELDSTREET Look beyond the stock market With stocks near record-highs, profits are only getting [harder to come by]( these days. In other words, [you’d be smart]( to look at investments that typically don’t move in line with the stock market. [Yieldstreet]( offers a way to do just that: an alternative investment platform where you can invest in real estate, art, aviation, legal finance, and more. You get to [choose from their unique suite]( of products across a range of asset classes, all with different yields, durations, and minimum investments. And since only a fraction of the [billions of dollars’]( worth of deals Yieldstreet analyzes make it onto its platform, you won’t have to spend all day looking for opportunities that [meet your needs](. You can invest with just $1,000: [get started today](. [Find Out More]( Please support our sponsors Fee, Fi, Fo, Fum [Fee, Fi, Fo, Fum] What’s Going On Here? Investors have poured $17 billion into sustainability-focused [exchange-traded funds]( so far this year, in hopes all these green initiatives sprouting up everywhere will lead to a golden goose. What Does This Mean? The US government is on a mission to approve [$2 trillion]( of infrastructure spending, which is expected to include a host of clean energy initiatives. And the impact of that environment-first thinking from the world’s biggest economy is already spreading across the globe: analysts are expecting governments and companies to issue $500 billion worth of “green bonds” – an increasingly popular way of financing green initiatives – this year alone. Italy’s already [leading the charge](, taking [$100 billion]( worth of orders for the $10 billion worth of green bonds it sold last month. Why Should I Care? For markets: Big oil firms are going with the flow. A global green agenda stands to hit traditional oil and gas firms hard, but some of the world’s biggest polluters are already falling into line. Just look at French oil giant Total, whose clean energy spending over the last five years represented a quarter of the world’s biggest oil companies’ low-carbon investments put together. This year, meanwhile, rival Shell has revealed plans to transition to cleaner output, as well as more than halve its “traditional energy” production by 2030. Zooming in: A fund by any other name might perform as well. There’s research to [show]( that the top environmental, social, and governance-focused (ESG) funds generate higher returns than their less socially responsible peers, but it’s hard to say exactly why. After all, research from Morgan Stanley [found]( that sustainable funds on average held more growth stocks – think fast-growing tech companies – than their non-ESG peers. And given how well those stocks have done over the last few years, it could be that they’re more responsible for the ESG funds’ outperformance than the whole “sustainability” thing is. You might also like: [What companies really mean when they tell you they’re “sustainable”.]( Copy to share story: [( 🙋 [Ask a question](mailto:questions@finimize.com?body=Ask us a question: Where are you writing from? Let us know and we'll mention it when we reply.&noapp=true&subject=Fee, Fi, Fo, Fum&utm_campaign=daily-global-05-04-2021&utm_source=email) 💬 Quote of the day “Whatever you are, be a good one.” – Abraham Lincoln (an American statesman, lawyer, and the 16th US president) [Tweet this]( SPONSORED BY EXODUS Take control of your money Investing in crypto can be pretty complex, especially when you’re new to it. But [Exodus]( is designed to feel as premium as it does simple to use, which is probably why Investopedia named it the [best wallet for beginners](. And Exodus didn’t sacrifice any features for that simplicity: it [supports over 130 cryptocurrencies]( seamlessly across desktop and mobile via their intuitive app. You can even [exchange one crypto directly for another](, earn interest on some of the most popular tokens, and [integrate a hardware wallet]( with the app. See for yourself: [download the Exodus app](. [Get The App]( Please support our sponsors 📚 What we're reading - A story about Snapchat, a cheerleader, and the future of free speech ([Slate]() - Even chefs are getting in on the space trend ([Space]() - So long, female Siri ([Gizmodo]() ❤️ Share with a friend Your Referrals: 0 Thanks for reading {NAME}. If you liked today's brief, we'd love for you to share it with a friend. If they sign up on your unique link, you’ll earn some sweet swag. Share your unique link: [ You stay classy, {NAME} 😉 We’d love to hear your thoughts. [Give feedback]( Want to advertise with us too? [Get in touch]( Image Credits: Image credits: Finimize | Mr. Evil Cheese Scientist - Flickr, welburnstuart - Shutterstock Preferences: [Update your email]( or [change preferences]( [View in browser]( [Unsubscribe]( from all Finimize Emails 😴 Crafted by Finimize Ltd. | Third Floor, 1 New Fetter Lane, London, EC4A 1AN, UK. All content provided by Finimize Ltd. is for informational and educational purposes only and is not meant to represent trade or investment recommendations. You signed up to this mailing list at finimize.com or through one of our partners. © Finimize 2021 [View Online](