- Jerome Powell's guidance on the Fed's policies suggests that inflation will continue strong well into 2022. This implies unprofitable companies with high valuations are not favorable.
- We studied the relationship between valuations and severity of drawdowns amid inflation fears and found that results align with past scientific literature and generalize well across the innovation growth sector.
- This study shows that investors should focus more on large-cap indexed growth companies and less on ARK-like companies to capture growth potential amid inflation fears.
For further details see:
Strong Inflationary Economy Favors VUG's Large-Cap Indexed Growth Holdings