In response to the coronavirus, the Fed created trillions of dollars out of thin air, Congress doled out trillions more, and the pandemic provided a tacit guarantee that interest rates wouldn’t rise. If Omicron means a return to regular order, investors will have to contend with the highest inflation in a generation, record fiscal debt and a Fed lacking a reason not to tackle inflation forcefully. At the same time, stocks and bonds are very expensive, limiting prudent investment options.“There’s no place to hide,” Melda Mergen, global head of equities at Columbia Threadneedle Investments, said during a presentation of the firm’s 2022 outlook. “Most of the markets are at the top of the bar in their current valuations.”She remains bullish toward stocks but emphasizes pockets that are less expensive, such as smaller companies and value stocks. She noted, though, that the valuation gap between growth and value stocks has narrowed, so the pickings are slimmer.Other investment advisers also recommend looking for less overpriced market segments, but they differ on where to find them. Mr. Sri-Kumar likes European stocks more than American ones, and he would b …
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