Higher for longer: The hope for equities lies in selection

Falling profits could reduce valuations

Higher for longer interest rates could lower share prices and reduce the desirability of equities to investors, but identification of growth opportunities may improve performance.

In the final instalment of Investment Week's ‘Higher for longer' series, we look into the impact of higher interest rates on equities and the areas within the asset class uniquely affected by the current market. The equity market has experienced significant market volatility over the past few years due to unprecedented events and a heightened macroeconomic environment, leading to outflows from equity funds as performance sank. The ambiguity around the central banks' interest rate path has destabilised the sector for a large part of the year and the recent pause from both the Federal R...