Low Interest Rates And Investors
What You Need to Know
Interest rates are important to investors and they are currently at or near all-time lows. At this past June’s Federal Reserve meeting, interest rates were kept at a range of 0%-0.25% and it was indicated that they will remain near zero until the economy recovers from the effects of COVID-19. How will this impact your investing decisions?
Below are four things to consider while navigating today's low interest rate environment:
- Be mindful of the ongoing public health crisis which will weigh heavily on economic activity, employment, and inflation.
- Keep a close eye on The Federal Reserve (Fed) as it determines the rates at which U.S. banks borrow money. Their changes can
produce a ripple effect across the entire economy.
- At today’s low interest rates, investors might not be able to generate the type of returns they need or want with a heavy emphasis on fixed income. At 1% it takes about 70 years to double your money and at 0.50% that time period grows to 139 years.
- Many borrowers are taking advantage of these record lows and banks are seeing an uptick in home purchasing and refinances.
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