Although mutual funds across many investment sectors fell steeply in the second quarter on fears of continued interest rate hikes and inflation, many portfolio managers are confident the economy and corporate profits will continue to deliver moderate growth, The Wall Street Journal reports. And even if the economy slows, as long as it does not fall into recession, they see areas of investment potential.

In fact, there was some evidence of the market's resiliency last Thursday when stock prices rose sharply despite another rise in rates by the Federal Reserve. Many on Wall Street are calling this "repricing of risk."

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