A Reason To Be Cheerful Not Gloomy
The equity investor cheer: Hip, hip, hooray, rates are rising!
Now you may not get quite this excited about the forthcoming higher rates, but the evidence reveals that such a reaction is closer to how you should feel rather than being anxious in the face of a strengthening economy. Higher rates, the residual of stronger growth, create an environment in which selling bonds and buying stocks makes eminent sense. These moves upgrade your future portfolio return along with providing greater protection against rising inflation.
Equity investors have every reason to be cheerful not gloomy as the Fed raises rates in 2017 and beyond.
So, sit back and enjoy the ride!
C. Thomas Howard, Ph.D. is the chief investment officer for AthenaInvest Inc.