Main Street AM CIO: Mid Caps More Attractive

The video discusses the undervaluation of mid caps compared to large caps, highlighting a 32% discount in forward PE ratios. It explores the impact of rising interest rates on fixed income and Treasurys, emphasizing the use of TIPS for inflation protection. Growth expectations for 2022 have been revised upwards, with S&P 500 EPS growth projected at 9.5%. The video also examines sector performance, noting positive revisions in financials and energy, and the importance of investing in high-quality companies.

What is the current trading status of mid caps compared to large caps?

• Mid caps are not being traded currently.

• Mid caps are trading at a premium to large caps.

• Mid caps are trading at a discount to large caps.

• Mid caps and large caps are trading at the same level.

What unusual market condition is highlighted regarding mid caps?

• Mid caps are unaffected by market conditions.

• Mid caps have always traded at a discount.

• Mid caps are trading at a discount, which is unusual.

• Mid caps are trading at a historical high.

Why are investors still heavily overweighted on TIPS?

• Because TIPS offer higher yields than traditional Treasurys.

• Because TIPS are less risky than stocks.

• Because TIPS prices have significantly increased.

• Because TIPS help retain value despite declining prices.

What indicates a potential shift back to traditional Treasurys from TIPS?

• A decrease in inflation rates

• A decrease in TIPS yields

• An increase in TIPS prices

• A change in relative price performance between TIPS and Treasurys

What is the revised EPS growth expectation for the S&P 500 in 2022?

• 12%

• 5%

• 7%

• 9.5%

Which sector is mentioned as volatile and challenging for timing investments?

• Healthcare

• Energy

• Consumer Goods

• Technology

What is the strategic focus when selecting companies in the face of inflation?

• Companies with high debt levels

• High-quality companies with pricing power

• Companies with low market capitalization

• Startups with high growth potential