2022 continues to give growth stocks — particularly those in the tech sector — a blunt reality check.

The tech-centric Nasdaq index is down 24% year to date, more than double the 10% decline of the Dow over the same period.

MoneyWise recently interviewed investing veteran Claudio Chisani — investment advisor and portfolio manager at BlueShore Financial — for his advice on how to navigate the current environment.

According to Chisani, the investment climate today is very different compared to years in the past, where stocks welcomed the benefits of accommodating monetary policy and abundant liquidity. And that calls for a shift in strategies.

“The tide has changed,” he says. “Staring at an environment of high inflation and higher interest rates, an investor would be well served to be a bit more conservative.”

With that in mind, Chisani suggests several areas where investors can still find attractive opportunities.

Financials

Chisani says it would be wise to start focusing on conventional dividend-paying strategies, such as looking at financials and insurance companies.

“Those would be beneficiaries of higher rates as long as rates do not get out of control.”

Banks lend out money at higher rates than they borrow, pocketing the difference. When interest rates go up, the spread earned by banks widens.

But Chisani also warns investors to pay attention to the default rate at financial institutions. If rates are rising at a pace that’s beyond expectations and places pressure on consumers’ mortgage payments, it could hurt bank earnings.

These days, banks are generous dividend payers. Several large U.S. institutions — including JPMorgan Chase, Bank of America, Morgan Stanley and Goldman Sachs — raised their payouts in 2021.

Investors can gain access to the group through ETFs like the Financial Select Sector SPDR Fund (XLF).

Chisani says it might also be worthwhile looking at financial names north of the border. Manulife Financial (MFC), he points out, is a Canadian multinational insurance company that offers a generous annual dividend yield of 5.5%.