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Three things to know when interest rates rise

As you know, unless you’ve been living under a rock, interest rates have been low for a historically long time. The forecast by many financial experts is that as the economy continues to improve the Fed will start the process of raising rates, potentially this September. This upcoming action by the Fed can be both good and bad thing. As investors it’s important that you understand what that impact may be, either good or bad so that you can look at your portfolio carefully for any risks that you may not be aware of. Here are three things that you must keep in mind as the Fed starts the process. 1. There will likely be some short term volatility. As the Fed meeting(s) take place and the rate decision comes out, you will most likely see some short term volatility in the market. No one knows whether that volatility is
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Categories: Markets and Strategy.

Inflation’s Impact on Investing Returns

Whether you know it or not your investment returns are under attack. The attacker known as inflation, is silent and slow but  it’s impact can be substantial over time. Understanding inflation’s impact on returns is important as investors work towards accomplishing their financial goals. The chart below is divided into three different asset class – stocks, bonds and cash. For each asset class there are two listed compound annual returns, before inflation (on the left) and after inflation (on the right). The after inflation returns are commonly referred to as real returns. So why is this important? It’s simple. If you’re an investor striving to accomplish your financial goals without understanding their potential “real returns,” you may be investing in something that may not even allow you to accomplish your goals. It’s our opinion that people may have to invest more of their money in stocks longer than they would like
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Categories: Markets.
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