Singapore-based financial blog that aims to educate people on personal finance, investments, retirement and their Central Provident Fund (CPF) matters.

Wednesday, 16 September 2015

Rate Hike = 9.5% Return


The 2-day Fed meeting is beginning today, with its focus on whether the Fed will raise interest rates or not!

LINKS
S&P500 Statistical Investment Opportunity
STI 3rd Year Investment Trend
Singapore Finance Minister on Personal Finance

While the markets are reacting negatively to the potential interest rates raise, believing that it will cause markets to drop; the reality is that markets actually do better when interest rates go up!

This is statistics from CNBC:
http://www.cnbc.com/2015/09/08/risk-parity-trading-is-causing-volatility-and-scaring-the-public-leon-cooperman.html

From the article, we can see that after every rate hike
1) Markets are usually up for the next 30 months
2) Markets are up 9.5% a year after the rate hike

So keep a lookout for those interest rates!
A hike might be a buying opportunity! - Especially if it brings with it a short-term drop of several percentage points!


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