• U.S. Treasuries and Treasury Inflation Protected Securities (TIPS), as I wrote last week.
• Bond-like stocks such as the consumer staples and utilities sectors.
• Gold. While I continue to believe that gold has a place in a portfolio, rising real rates are a headwind for the precious metal.
The current environment – just enough economic growth and suppressed wages – has allowed corporate America to churn out record profits, a factor helping to support this year’s big rally in stocks. I believe this will continue into 2014, although higher rates suggest that any gains are likely to be accompanied by more volatility.
Russ Koesterich, CFA, is the Chief Investment Strategist for BlackRock and iShares Chief Global Investment Strategist. He is a regular contributor to The Blog and you can find more of his posts here.
Sources: BlackRock Weekly Commentary, Bloomberg