Rates Still A Risk For Stocks

2025-03-01 06:00:00 ET

Summary

• History has shown that an abrupt move upward in interest rates can lead to a stock market correction, often resulting in a significant impact on returns.
• With U.S. government budget negotiations ongoing, an extended deficit could push investors to buy longer-dated bonds, likely pushing rates higher.
• Keeping these risks in mind, investors could benefit from incorporating additional hedges into their portfolios – namely gold and short-dated Treasuries – to protect themselves from such a move.

Markets generally go down for one of three reasons: a recession, higher interest rates or an exogenous shock, such as the COVID-19 pandemic or the 9/11 attacks. While I continue to believe stocks will end the year higher, if we do see a correction, higher rates are probably the larger risk....

Read the full article on Seeking Alpha

For further details see: