Fed expected to hold rates steady – what investors should do now

<p><strong>By George Prior </strong></p>
<p>The Federal Reserve will almost certainly hold interest rates steady for the second meeting in a row today at the highest level in some 22 years.</p>
<p>This would support expectations from deVere Group, one of the world’s largest independent financial advisory, asset management and fintech organizations, of a year-end rally in 2023.</p>
<p>It also means that most investors will need to revise their investment portfolios.</p>
<p>The analysis from Nigel Green, deVere Group CEO and Founder, comes ahead of the US central bank’s Big Decision on interest rates at 2pm ET (7pm GMT).</p>
<p>He comments: “The markets will be buoyed by the Fed not raising rates as it means we’re nearer to the end of the most aggressive rate-hiking programme in generations.</p>
<p>“But the markets have already fully priced-in this Fed decision, so we don’t expect it to send stocks skyrocketing on this news alone.</p>
<p>“However, the Fed holding rates steady again does add fuel to our expectation of a 2023 year-end rally.”</p>
<p>On Tuesday, the deVere CEO told the media: “History shows that November is the second-best month of the year for markets, behind April.</p>
<p>“This November could be even more positive as some markets are currently in correction territory – falling by more than 10% &#8211; and so a swing to the upside will be more pronounced.</p>
<p>“Over 72 years there have been 34 market declines. Only 12 of these have turned into bear markets. When does a recovery typically happen? 96 days after the start of the correction. We’re now around day 90.</p>
<p>“If all this data holds up, we’re about to see a year-end rally, which investors would not want to miss out on.”</p>
<p>While the Fed may be done hiking, there is a wider expectation that they’re going to keep rates higher for longer.</p>
<p>As interest rates are anticipated to remain elevated for an extended period and a year-end market rally is expected, investors must adopt a prudent approach to navigate these evolving financial landscapes.</p>
<p>To thrive in such conditions, Nigel Green suggests five important strategies that investors should consider.</p>
<p>“First, maintain a well-diversified portfolio that spreads risk across various asset classes. Diversification can help mitigate the impact of rising interest rates and market volatility.</p>
<p>“Second, evaluate your risk tolerance and investment goals. Ensure that your portfolio aligns with your financial objectives, and consider adjusting your asset allocation accordingly.</p>
<p>“Third, given the potential for higher market volatility, active management can be valuable. Reassess and rebalance your portfolio as needed to capitalise on opportunities and manage risks effectively.</p>
<p>“Four, explore fixed-income investments that are less sensitive to interest rate changes, such as short-term bonds, structured notes or inflation-protected securities.</p>
<p>“Five, keep a long-term perspective and avoid making impulsive decisions based on short-term market movements. Stick to your investment strategy and avoid trying to time the market.”</p>
<p><strong>About:</strong></p>
<p><em>deVere Group is one of the world’s largest independent advisors of specialist global financial solutions to international, local mass affluent, and high-net-worth clients.  It has a network of offices across the world, over 80,000 clients and $12bn under advisement.</em></p>
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