UBS Warns of Imminent Rate Hike: Own Dividend-Payers, Avoid Tech Stocks
UBS analysts are predicting a Federal Reserve rate hike is imminent, and they're outlining which assets to own and avoid in this environment.
The investment bank's strategists believe that the Fed will increase interest rates by at least 25 basis points in its upcoming decision, citing inflationary pressures and a strong labor market as drivers of their forecast.
According to UBS, investors should consider owning assets with high dividend yields, such as real estate investment trusts (REITs) and utility stocks. They also recommend allocating funds to gold, which they believe will benefit from higher interest rates due to its negative correlation with the US dollar.
On the other hand, UBS advises investors to avoid high-growth tech stocks and cryptocurrencies like Bitcoin and Ethereum, as these assets tend to perform poorly in a rising-rate environment.