الجمعة, 21 أيلول/سبتمبر 2018 09:04

What Investors Misunderstand About Rising Rates

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(New York)

The whole market is generally afraid of rising rates. Both in 2015 and 2018, there were significant mini-meltdowns about the prospect of aggressive rate rises. One of the aspects that most worries investors is that higher rates will drive participants out of stocks and into higher-yielding bonds. However, while true in some respects, that narrative is far too simple. Higher rates are a symptom of a healthy and growing economy, which means the business fundamentals driving stocks are getting better, a factor which is likely far more important than incremental changes in rates.


FINSUM: We think there is some wisdom in these words, especially as they perfectly encapsulate what has happened with the market this year.

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