How do interest rates affect my investment decisions?

How do interest rates affect my investment decisions?

Interest rates can significantly impact your investment choices. When rates rise, borrowing costs increase, which can slow down economic growth and affect stock prices.

What happens to stocks when interest rates go up?

Typically, when interest rates rise, stock prices may fall as companies face higher borrowing costs and reduced consumer spending.

Should I invest in bonds when interest rates are high?

Investing in bonds during high interest rates can be beneficial, as new bonds will offer higher yields. However, existing bonds may lose value.

How can I protect my investments from rising interest rates?

You can consider diversifying your portfolio, investing in inflation-protected securities, or focusing on sectors that perform well in a rising rate environment.

Are there specific sectors that do well when interest rates rise?

Yes, sectors like financials often benefit from rising interest rates, as banks can charge more for loans. Utilities and real estate may struggle.