Once more we witness the rising volume of debate from both the media and Fed governors whether to increase short term rates. During these junctures, income- producing securities typically weaken in price.
Eventual outcomes aside, what appears enduring to Venturi is demand for investments providing a steady, growing income stream. Why? Two reasons. The impact of an extended low rate environment coupled with an aging developed world demographic. Both retirees and pension managers must look beyond bonds to meet income requirements historically provided by CDs and bonds. As the green brackets in the chart below spotlight, future retiree numbers will only grow, and assuring their current lifestyle is top priority. As a result, these wage-replacement-seeking seniors will compete with both their cohorts and institutions to continue purchasing income-producing stocks. Those same stocks are not immune to catching cold when the Fed publicly contemplates raising short term rates.
At Venturi, we invest to both preserve a client’s current lifestyle and grow their assets for the next generation.