What do you do when Fed raise interest rates ?
If you are like most home owners with a mortgage to pay each month, the upcoming interest rate increase would not be a good news! Basically, we would be paying more out of our pocket each month to service the loan.
The important things to bear in mind are :
1. Is your wages growing in tandem with the increment ?
2. Is inflation in your country creeping up as well?
Currently, banks worldwide are offering peanuts to negative interest rates for money that you deposit with them. Surprisingly, millions still stash their money with banks for the pathetic interest rate although there are many ways to grow their money. (Explain this more next time)
So, if your net income is dwindling and your expenses are ballooning, how else can you cope ? Some gurus would advise you to cut your expenses. That works if you use your heads but most of us are tempted by advertisements, shopping malls, the convenience of fast foods, etc to both release our stress and satisfy our wants. We "feel" we deserve a break , a reward of sort.
I think a better way is to identify better yield producing assets that we can park our money now in preparation for the interest rates increase. Bank stocks like Citibank , BAC, JPM (check your own local country's banks) are one of my preferred assets.
As retail investors, we must do our homework and not merely follow the crowd or allow our "old dying habits" to stop us from getting more bang out of our savings.
Best of luck !!!
The important things to bear in mind are :
1. Is your wages growing in tandem with the increment ?
2. Is inflation in your country creeping up as well?
Currently, banks worldwide are offering peanuts to negative interest rates for money that you deposit with them. Surprisingly, millions still stash their money with banks for the pathetic interest rate although there are many ways to grow their money. (Explain this more next time)
So, if your net income is dwindling and your expenses are ballooning, how else can you cope ? Some gurus would advise you to cut your expenses. That works if you use your heads but most of us are tempted by advertisements, shopping malls, the convenience of fast foods, etc to both release our stress and satisfy our wants. We "feel" we deserve a break , a reward of sort.
I think a better way is to identify better yield producing assets that we can park our money now in preparation for the interest rates increase. Bank stocks like Citibank , BAC, JPM (check your own local country's banks) are one of my preferred assets.
As retail investors, we must do our homework and not merely follow the crowd or allow our "old dying habits" to stop us from getting more bang out of our savings.
Best of luck !!!
評論:
a good buying opportunity
