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Stocks Do Very Well During Periods of Rising Rates

edited March 2021 in The Bullpen
The problem with the current rate environment is we’ve never experienced interest rates this low before. Maybe investors will become spooked at lower rates than they have in the past. Maybe markets will be given the benefit of the doubt if the economy is chugging along.

The truth is there is no rule of thumb with these things.

But rising rates, in and of themselves, don’t always spell doom for the stock market.
the remainder of 2021 is unlikely to be a fun one for bond investors. There is a continued asymmetric interest rate risk to the upside that exposes bond investors to unusually poor risk adjusted returns. But let’s not get carried away. Hyperinflation isn’t coming and the probability of a 1970s style 10%+ inflation remains low.
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