Rising interest rates and higher inflation have continued to cast a cloud of uncertainty over the equity market for many investors. With volatility back in the limelight, all of Polen Capital’s investment teams look closely at what opportunities we see in this environment.
- Our views on the current economic backdrop and what the future might look like
- The historical relationship between inflation, interest rates, and equity markets
- Why we believe investing in high-quality growth stocks may be the best hedge against inflation
- Examples of companies we think can thrive during different macroeconomic scenarios
- Opening remarks & introduction (0:08)
- Historical context for U.S. inflation levels & the impact of recent COVID policies (3:10)
- How might investors reconcile higher inflation with prospects for higher interest rates? (8:51)
- Polen’s perspective on rising interest rates & inflation, along with the potential effect of secular trends (10:44)
- How could macroeconomic forces impact equity markets & the underlying value of businesses? (14:48)
- Insights into the relationship between inflation & cash flows, margins & balance sheets of companies (20:43)
- From Polen’s point of view, which types of businesses are best positioned in this environment? (26:02)
- Examples of high-quality growth stocks Polen holds in its portfolios across the cap spectrum (33:06)
- How might equity investors prepare for a period of structurally higher rates & prolonged inflation? (40:05)
- Lessons learned from other global economies where inflation has been historically volatile & high (41:38)
- In Polen’s view, how do geopolitical factors contribute to inflationary pressures? (43:00)
- Closing remarks & final thoughts (44:10)
We believe the high-quality, competitively advantaged businesses we own can survive & thrive in any economic environment.
—Pamela Macedo, CFA & Research Analyst
This information is provided for illustrative purposes only. Opinions and views expressed constitute the judgment of Polen Capital as of February 2022 may involve a number of assumptions and estimates which are not guaranteed and are subject to change without notice or update. Although the information and any opinions or views given have been obtained from or based on sources believed to be reliable, no warranty or representation is made as to their correctness, completeness, or accuracy. Opinions, estimates, forecasts, and statements of financial market trends that are based on current market conditions constitute our judgment and are subject to change without notice, including any forward-looking estimates or statements which are based on certain expectations and assumptions. The views and strategies described may not be suitable for all clients. This material does not identify all the risks (direct or indirect) or other considerations which might be material to you when entering any financial transaction.