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How Do Higher Interest Rates Impact Your Investments? | AWM Insights #178
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Interest rates across the board are at or near their highest levels in the last 15 years. While it's more expensive to get a mortgage nowadays, investors are benefiting from these higher rates with their investable assets.
Short-term Treasuries are generating more than 5%, which is significantly higher than the rates we have seen for the last decade. It's important to remember that over the long run, Equity markets have returned more than 9% annually.
Equities are riskier than bonds but have historically also had higher returns during periods of high-interest rates and have more protection against inflation.
A thoughtful approach and implementation strategy are needed to ensure that funds are allocated toward the right assets to protect your goals and priorities while also optimizing your returns in the market.
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Episode Highlights
- 0:00 Intro
- 0:20 Using high-interest rates to your advantage
- 1:42 How uncommon are these high-interest rates?
- 3:22 How do higher interest rates affect stock performance?
- 4:57 The Risk and Return dynamic over long periods.
- 6:43 How does your financial structure impact the risks you take?
- 7:45 The building blocks of expected returns and how do they relate to your financial structure?
- 10:50 Text us!
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