When interest rates are high, stocks can experience bouts of increased volatility. But that hasn't been the case this past year. Here's what investors should consider when looking at interest rates and their influence on stock prices.
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Financial Advisor ( Mandarin and English) MBA & CRPC™️with Ameriprise Financial Services, LLC, a NYSE listed Fortune 500 company (ticker symbol AMP)
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When interest rates are high, stocks can experience bouts of increased volatility. But that hasn't been the case this past year. Here's what investors should consider when looking at interest rates and their influence on stock prices.
Will high interest rates dampen stock momentum?
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Financial Advisor with Bering Street Advisors, A private wealth advisory practice of Ameriprise Financial Services, LLC
Here’s what investors should consider when looking at interest rates and their influence on stock prices moving forward:
Will persistently high interest rates dampen stock momentum?
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Here’s what to consider when looking at interest rates and their influence on stock prices. Let’s talk about it!
Will persistently high interest rates dampen stock momentum?
ameripriseadvisors.com
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Here’s what to consider when looking at interest rates and their influence on stock prices. Let’s talk about it!
Will persistently high interest rates dampen stock momentum?
ameripriseadvisors.com
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23/24 | THE YEAR THAT WAS AND THE YEAR TO COME Last year exceeded even the optimists’ expectations. Inflation retreated largely as anticipated while the economy remained surprisingly strong and unemployment stayed low. The growing hope that inflation will be tamed without a recession fueled a strong year for stocks, especially mega cap growth stocks, with the S&P 500 up 24.2% (26.3% with dividends). Most stocks significantly lagged the headline index yet had a good year nonetheless with the equal-weight S&P 500 up 11.7% (13.7% with dividends). https://lnkd.in/gRyXSt73
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🤓 Investors know that the stock market moves in cycles, but few are comfortable when the cycle takes stock prices lower. And since late August, the cycle has been decidedly lower. If you’re looking for reasons to worry, you don’t have to look for long: The trend is not my friend: In late August, the S&P 500 was approaching 4,600. As November approaches, it’s down roughly 10% from that 2023 high.1,2 Oil prices: Oil prices have been trending higher since late June, and some fear the price will continue to climb. Higher oil tends to be inflationary.1 Bond yields: The 10-year treasury has been flirting with a 5% yield for much of October. When bond interest rates move higher, stock prices can move lower.1,2 Tensions in the Middle East: The daily headlines are upsetting and frightening. Fed Watch: The Fed is giving mixed signals about interest rates in its fight against inflation. Some Fed presidents believe rates are high enough, but Fed Chair Powell is not so certain.3,4 Volatility picks up: The CBOE Volatility Index has been hovering around 20 since late October. Higher volatility tests the mettle of the most seasoned investor.1 👉 During these periods, it’s frustrating to be an investor. But remember, when the market trends lower, stock prices will reset at new price levels. As the market moves through this process, it may be best to avoid watching the day-to-day price action if it’s causing you to question your overall strategy. If you want an update, please give us a call! 1. Finance.Yahoo.com, October 27, 2023 2. The S&P 500 Composite Index is an unmanaged index that is considered representative of the overall U.S. stock market. Past performance does not guarantee future results. Individuals cannot invest directly in an index. The return and principal value of stock prices will fluctuate as market conditions change. And shares, when sold, may be worth more or less than their original cost. 3. CNBC.com, August 31, 2023. “Fed’s Bostic says U.S. interest rates are high enough.” 4. APNews.com, October 19, 2023. “Fed Chair Powell: Slower economic growth may be needed to conquer stubbornly high inflation.”
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Managing Director and Financial Advisor at Next Level Financial Advisors, A financial advisory practice of Ameriprise Financial Services, LLC
Here’s what to consider when looking at interest rates and their influence on stock prices.
Will persistently high interest rates dampen stock momentum?
ameripriseadvisors.com
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Financial Advisor | Skyeburst Wealth Management, a private wealth advisory practice of Ameriprise Financial Services, LLC.
Here’s what to consider when looking at interest rates and their influence on stock prices.
Will persistently high interest rates dampen stock momentum?
ameripriseadvisors.com
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Here’s what to consider when looking at interest rates and their influence on stock prices.
Will persistently high interest rates dampen stock momentum?
ameripriseadvisors.com
To view or add a comment, sign in
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Here’s what to consider when looking at interest rates and their influence on stock prices.
Will persistently high interest rates dampen stock momentum?
ameripriseadvisors.com
To view or add a comment, sign in
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