2 Reasons Why You Shouldn't Worry About Rising Interest Rates, and 2 Reasons Why You Should
With the Federal Reserve announcing on Sept. 21 that it would increase the target for the federal funds rate once again in keeping with its recent campaign to crush inflation, investors everywhere are trying to figure out what rising interest rates mean for their portfolios. As it turns out, that's a pretty complicated question, but the most straightforward answer is that it'll put downward pressure on the market.
Still, higher rates aren't going to affect every stock in the same way, so let's take a look at two reasons why you might not need to overly worry about it, and two reasons why you should probably be at least a bit concerned.
The first reason you shouldn't worry about the rising federal funds rate is that it isn't the be-all and end-all for growth in all businesses. Profitable companies can often generate enough free cash flow (FCF) to keep penetrating their markets and making new products without the help of any outside capital. That means there will still be good investments to find as rates rise, even if the market's general trend continues to be downward.
Source Fool.com
