IMPENDING RATES CUTS AND WHAT IT MEANS TO YOUR PORTFOLIO
In 2019 the Feds have lowered interest rates two times and another possible rate cut is on the horizon
What does this mean to your portfolio?
While a rate cut normally makes the stock market rally it could have a negative effect on your bonds, CD’s, and the rates of money markets.
The downside of a rate cut could mean that people who depend on income from savings accounts could see rates of return as low as 1% according to some analysts.
When the rates are cut the bond market funds typically go to the stock markets in search of better returns on their money. Not all markets will be up at one time typically if one is up that means one is down.
With the average CD rate being 2% or less consumers are seeking better avenues to place their money for higher rates of return. If you already purchased a CD you may be locked into the rate. If you have not and are considering purchasing a CD rates could be lower and you may find better investment opportunities with more growth potential.
If you currently own money market accounts the rate cut may affect your portfolio with lower rates. If you own a Money Market Fund these rates may not have the same effect in your portfolio depending if they are taxable or tax free.
Rate cuts affect other avenues as well such as real estate, gold, and short term loans again affecting your portfolio.
We can provide several different strategies to assist in your financial success and overall performance of your portfolio. We can offer options to add a growth to your investment plan. Call today for a FREE consultation.