Stock market investing experts pay attention to a variety of market dynamics, and it helps to get additional insight into what’s driving current trends. In the October issue of the Investor Advisory Service, the editors take a look at why interest rates affect stock prices and what you need to watch for when changes occur.
Stock market investing experts pay attention to a variety of market dynamics, and it helps to get additional insight into what’s driving current trends. In the October issue of Investor Advisory Service, the editors take a look at why interest rates affect stock prices and what you need to watch for when changes occur.
Interest rates tend to look more favorably upon bonds when interest rates are higher, and some investors use interest rates to calculate the value of stocks through various simple formulas, the editors note.
According to IAS’ experts, interest rates actually have been “detached from reality” for several years, but in June interest rates moved up briefly. This caused the stock market to quake a bit.
Obviously, the Federal Reserve Board’s moves regarding interest rates have a significant effect on investing trends. “The issue of rising interest rates will remain the subject of debate, and possibly a cause of volatility in the financial markets,” IAS’ experts note. In the latest IAS newsletter the editors exploring the possible effects of the Fed’s moves—as well as broader economic trends—in detail. Subscribers may log in at the Subscribers Area to access the full issue.