In light of market turmoil – let’s skip right to the answer. No, oddly enough higher rates do not hurt share prices.*
Indeed, equities reliably perform better when real rates are rising by at least 100bps then they do when rates are falling.
Just as rates are not hurting stocks, we also don’t believe rates have risen enough to cool the economy.
That said, it’s not easy stomaching this market turbulence. Please don’t hesitate to reach out if you’d like to talk one-on-one about what's going on in your portfolio.
And,
We're Quish, with the tagline sustainable wealth.
A term like “sustainable wealth” might mean something different to everyone – and that is kind of what we like about it.
Taking action on global warming √
Growing wealth for the long-term √
Embracing nontraditional families √
Taking your values into account in your portfolio √
LGBT welcome √√
Together, we’ll make a difference. For this generation and the next.
Weekly Update through October 19, 2018 The S&P 500 added 4bps, even as the Dow Jones gained 45bps, the Russell 2000 declined -22bps, and the Nasdaq lost -64bps.
As for US bonds, they lost -37bps.
Globally, the MSCI World Index was down-3bps and the Barclays Global Aggregate Bond Index lost -33bps.
The Euro Stoxx 50 added 54bps in local-currency (Euro) and 16bps in USD. Meanwhile, the Topix declined -56bps local-currency (Yen) and -97bps in USD.
Thank you for doing business with us! We always appreciate your valuable insight and feedback.
*One would not be rebuked for such a view - higher rates ergo lower net present value is a computational - though not real world - given.
