You need a magnifying glass to see how low interest rates are today. I save you time with my chart series here. When everyone’s saying, “the Fed isn’t raising rates until late 2022 or early 2023,” don’t you think that’s already baked into today’s cake? Of course, it is.
When inflation is already an issue, the Fed doesn’t want to rock the boat and increase the cost for payments on our nation’s debt. The Fed is hoping for a good outcome just like any other human. And that’s the problem with human nature: hubris.
Instead of having a set of instructions and rules to follow in setting rates, the Fed moves its chess pieces as if it’s a Queen’s Gambit child prodigy. Look, I’m Your Survival Guy not “Your Chess Master,” but these moves are obvious.
This honeymoon for stocks won’t last forever. How much can you take if your stocks fall by a third like they have three times already this century? And a third is being kind. Remember how Nasdaq cratered in the tech bust?
Focus on blue-chip dividend payers, a value play Your Survival Guy loves. Don’t get greedy with the yields. You just want payers with a track record of paying above-average dividends while consistently increasing them.
Action Line: Remember, I’m the weatherman, not the weather. Sorry, but bad stuff happens. Stick with me to get through the storm. But only if you’re serious.
E.J. Smith - Your Survival Guy
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