The September FOMC decision and subsequent rise in long-end yields have reset near-term assumptions for equity investors. When the 10-year Treasury approaches 5%, the opportunity cost of equity risk becomes more visible—and so does the importance of earnings durability.
Rather than treating duration and equity beta as separate conversations, we prefer an integrated process: define the role of equities in the plan, stress-test valuations under higher discount rates, and avoid binary 'risk-on / risk-off' swings that amplify trading costs.
Our base case remains constructive on U.S. equities where earnings growth remains broad and balance sheets are sound. We are more cautious where valuations discount perfection and where rising real yields could pressure long-duration growth stories.
Heading into the fourth quarter, preparation matters more than prediction—clear objectives, diversified equity exposures, and a willingness to rebalance as policy and data evolve.
This material is for informational purposes only and does not constitute investment advice or an offer to buy or sell any security. Past performance is not indicative of future results. All investments involve risk, including possible loss of principal.