When the notion of tapering was first raised in May, it was widely heralded as the end of a multi-decade bond rally, with yields rising from their very low levels.
However, bond prices spiked on the back of the Fed's decision to postpone the reduction of its QE programme, but the fact that the central bank cannot keep pumping tens of billions of dollars into the system forever means yields will eventually rise again.
As Iain Stealey, manager of the JPM Strategic Bond fund, points out: "Tapering is going to happen at some point, but it’s going to be very data dependent."
"We will wait for the dust to settle before adjusting our view on core rates. While in the medium-term the drift higher in yields should continue, the next few months are now less clear and short-term we could see some buying."
Williams (pictured) says that because bond yields are going to be forced lower by more QE, investors should concentrate on dividend-paying stocks.
"The market has liked equity income stocks and they have been outperforming," he said. "The fact that you can find a good and growing income from them means that they have a huge advantage over bonds.""What has been interesting has been that mega cap stocks have lost momentum while mid to micro cap stocks have pulled away. It had been mid and large caps that led the rally, but now it is mid and small caps."
"I think that trend will probably continue as those companies are recovering from sub-normal valuations. They tend to have a better yield than larger stocks and can buck economic trends because they focus on more niche areas of the market," he added.
FE data shows that UK mid and small caps have rallied strongly compared with FTSE 100 stocks so far this year.
Performance of indices year to date
Source: FE Analytics
However, Williams says a similar situation to the start of the year could develop, where investors flock to defensive blue chip names that pay a dividend, which could lead to the large cap index spiking from here.
Although Williams says that equity income will continue to be the asset class to be in, he suggests that there may be quick money to be made from the more unloved sectors as people panic and invest their money anywhere.
"While I think high-income stocks will continue to attract inflows because of the low interest rate environment, the point that I don’t know is to what degree more high-beta stocks will perform."
"There could be a temporary period where higher beta sectors such as miners and emerging market equities begin to catch up from their low levels. So I wouldn’t be surprised if we saw a period like before 2008 where higher beta stocks drove markets."
"Though I would expect that to be a bit of a snap rally," he added.
These areas of the market have certainly struggled recently. Our data shows that the MSCI Emerging Markets index and the MSCI World Mining Index have been on a downward trend over the last three years.
Performance of indices over 3yrs
Source: FE Analytics
Another area of the market that reacted well to the postponement of tapering was gold bullion.
This year has been a particularly difficult one for the precious metal, with it losing about 20 per cent of its value. However, its price rose by more than 4.5 per cent yesterday on the back of the Fed's announcement.
Robert Jukes, global strategist at Cannaccord Genuity Wealth Management, says investors should still steer well clear of gold as its price could fall further.
"Gold was an attractive investment when there were large levels of uncertainty. Issues like the possible breakup of the eurozone meant that gold was the natural haven for cautious investors," Jukes said.
"However, I said earlier this year, and I stick by it, that I felt gold could fall to $1,000 over the next few years."
"It is really a story of a strong dollar at the moment, which has hurt gold."
"Obviously, the fact that the Fed has said it will continue with its QE programme may mean you question that, and I do sympathise with that. However, over the longer term the US does have growth potential."
"Though it isn’t particularly high growth, it is the best of a bad bunch," he added.