It is increasingly likely that May or June may be the next target for a FED rate hike. However, keep in mind that we have the French elections coming and that may move the dollar higher as the Euro caves in. The breakup of the EU is gaining momentum and Draghi has been proven to be completely inept in his attempts to manage the European economy. Instead of creating a recovery, he has deepened the divide and brought the EU to the brink of collapse.
Rising Interest Rates
Yellen raising rates is exactly what I warned would happen and precisely why we adjusted our Freedom Portfolios. As the dollar strengthens and Europe looks more questionable, the capital flows move to the dollar creating the appearance of an asset bubble. There really is no asset bubble yet.
Big numbers scare people, but percentages do not. We all want double digit gains, so an increase from $10 to $15 is a nice 50% gain over 3 Years. Well, when you talk about the Dow Jones going from 20,000 to 30,000 it sounds huge! But the reality is that it is the same 50% growth rate. Historically, this is right in line. Nonetheless, there will be a corrective decline so follow your arrows.
Where your money is invested within your retirement accounts does matter!
The mainstream media has declared outright war on Trump. So, as the stock market rises, the media will turn and blame Trump saying he is just making his rich friends richer. This is what will compel the Fed to raise rates more to stop the non existent asset bubble, which in turn will attract more capital to the dollar and send small emerging markets over the cliff.
This is why you must follow our Freedom Portfolioallocation percentages within your 401k and other retirement accounts. Making these adjustments will lower your portfolio risk and allow gains to come rapidly.
InterAnalyst has been serving investors globally since 1990. Authoring hundreds financial articles and publications, thousands of trading charts to investors worldwide.