What happens when interest rates change?
As we move into December, the closer we get to another possible interest rate hike from the Federal Reserve. From one point of view, increasing rates could be viewed as a positive, as an economy grows, sometimes the brakes need a little tap (in the form of a rate increase) to slow movement down a bit. As investors, we hopefully have been partaking in the growth as the same time the economy has been growing. Also, when rate increases do happen, the markets generally tip in a price, and for those diligently contributing on a regular basis or perhaps those waiting with some spare cash to invest, these opportunities can prove beneficial over time.
Though it might be awhile before we notice anything any benefit from interest on our bank deposits, a rate hike would be a step in the right direction. For a more in depth explanation of the effect of rate increases, please check out the information provided on Investopedia below:
Nate Lovik Investment Advisor Representative