Are rising rates inherently bad for the market?
The reality is that rising rates are not inherently bad for the market. Although the media, neighbors, and co-workers are all telling you to get out of the market before rates go higher, we’ll not fall into the trap. Rather, we’ll just remind you that the very reason the Fed raises rates is because the economy is getting too strong! What an incredibly bullish environment for almost all stocks! History has shown us that the market can and does go higher in a rising rate environment, which means that there is no pre-determined course of action following a rate hike. Although investors assign a great deal of meaning to interest rate changes, the fact of the matter is that the market moves higher when there are more buyers than sellers. Likewise, the market moves lower when there are more sellers than buyers. The ‘data’, such as interest rates, is used to justify those actions. The irony is that the same data can be interpreted in multiple ways. So what does this have to do with responding
