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Get In The Game – Payne Capital Management
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Get In The Game

Get In The Game

 

By Michelle McKinnon, Financial Advisor

A few months ago, many people in the financial industry were dreading the possibility of an interest rate hike by the Federal Reserve (“Fed”). So what happened? Well, the Fed did raise rates, but by only a quarter of a percent.

Three Keys:
1

A possible interest rate hike by the Federal Reserve had been cause for concern

When this increase happened, some interest rates actually went down

For months and months prior to the rate hike, everyone was speculating how the equity and bond markets would react. One would naturally believe that if the discount rate (the interest rate that the Fed controls) was about to be increased, that the bond market interest rates would follow. But in this case, the months following the rate hike, interest rates actually went down. Why? Well, the reality is that markets often have already priced in the news and there are many other factors that influence the bond market besides just the Fed’s Discount rate moves.

What’s the lesson here? Well my advice is stop trying to anticipate, and get in the game. By staying on the sidelines, you’re missing out on dividends and interest. Remember, cash is paying 0.01% whereas a diversified portfolio of stocks and bonds is paying anywhere between 3-4% annually (just in dividends and interest). Let’s stop guessing and get invested.

 

 

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IMPORTANT DISCLOSURE INFORMATION
Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Payne Capital Management, LLC), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Payne Capital Management, LLC. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. Payne Capital Management, LLC is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the Payne Capital Management, LLC’s current written disclosure statement discussing our advisory services and fees is available for review upon request.