While the narrative about the Federal Reserve hasn’t been that positive for a number of sectors, the story of financial stocks has been a pretty great one. As the Fed has raised rates and telegraphed that it would continue to do so in the near future, banks, insurance and other financial stocks have rallied over the course of the year.
That is, until recently. Gains from the major banks have flatlined over the past few weeks as the rising interest rate story is now well known to investors, big and small.
But investors in banks shouldn’t fret, there are still plenty of reasons why stocks in the sector could still see significant gains over the next few years. And many of them have nothing to do with the Federal Reserve and its course of interest rate hikes.