Why Rising Interest Rates Aren’t As Scary As You Think

Posted On June 13, 2017 12:08 am

Many investors think that the main driver of the stock market’s epic 9 year bull market is the Federal Reserve’s massively accomodative policies of the last decade, specifically record low interest rates, and about $3.5 trillion worth of quantitative easing or QE. Thus, the Fed’s attempts to normalize interest rates, both by raising its Fed funds rate, and gradually rolling off its balance sheet, is viewed as a potential source of the next market correction, if not a catalyst for the next market crash.

However, the truth, as with all things in finance, is more nuanced. Let’s take a look at the good, the bad, and the ugly side of the greatest Fed accomodation in history, to give you a better idea of what might happen in both the economy, and the market in the coming years.

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Dividend Sensei
Dividend Sensei

I'm an Army veteran and former energy dividend writer for The Motley Fool. I currently write for both Seeking Alpha, Simply Safe Dividends, and DividendSensei.com My goal is to help all people learn how to harness the awesome power of dividend growth investing to achieve their financial dreams, and enrich their lives. With 22 years of investing experience, I've learned what works and more importantly, what doesn't, when it comes to building long-term wealth and income streams. I'm currently on an epic quest to build a broadly diversified, high-quality, high-yield dividend growth portfolio that: 1. Pays a 5% yield 2. Offers 7% annual dividend growth 3. Pays dividends AT LEAST on a weekly, but preferably, daily basis

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