Kevin Mahn, chief investment officer of Hennion & Walsh, in Parsippany, N.J., generally agrees with the “mixed bag” message from Fed watchers, indicating that Yellen is most likely edging to the more aggressive side of the rate hike issue.

“While I believe the Federal Reserve would like to have adopted more of an increasingly hawkish stance, given solidifying economic data in the U.S. and mounting inflationary pressures this year, they have instead taken more of a dovish tone,” Mahn notes. “However, this hawkish/dovish stance from the Fed appears to be now be leaning more towards a hawkish stance. That’s because Janet Yellen recently stated that she feels the case for an increase in the federal-funds rate has strengthened in recent months, while Kansas City Fed President also recently suggested that it is time to move rates.”

Mahn believes the Fed will likely embark upon a gradual and protracted period of tightening when it does commence upon a cycle of interest rate increases – similar to what occurred during the 2004 to 2006 timeframe when the Fed raised the Fed Funds target rate seventeen different times, in 25 basis point increments.

“The only difference during this round of tightening is that the Fed may also consider starting to slowly shrink the size of their U.S. Treasuries and government agencies securities balance sheet over time, in conjunction with increases to the Federal Funds target rate,” he notes. “So, instead of just considering raising rates further after each Federal Open Markets Committee meeting, they may consider some form of a gradual “one-two” punch of rate increases and sales of U.S. Treasuries.”

As a result, Mahn believes that investors would be wise to consider asset classes and sectors that have historically performed well during previous periods of gradual and protracted interest rates increases, such as the 2004 -2006 period. To Mahn, energy, utilities and telecommunications top that list.

Click here to read the entire article on TheStreet.com.