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We just raised interest rates for the second time this year. Now, we're expected to raise them two more times.
Is it time to start worrying yet?
It must be time to worry. Popular economic theory dictates that rising rates make fixed-income investments more attractive than equities. Investors will sell stocks and buy bonds, being the rational, thoughtful folks they are all the time.
Higher interest rates also mean higher interest costs for corporations and consumers alike, forming the double whammy of lower profits and lower spendable income that will inevitably ensure the stock market tanks.
The folks on TV looked pretty worried about it. I should be as well, right…?
Are you kidding me? If you want to worry, there's a veritable smorgasbord of much more worrisome stuff out there…
We ignited a trade war with several allies that could hit the economy pretty hard if it lasts for the foreseeable future.
We have a looming UPS strike in which 260,000 pissed-off Teamsters could instigate an economic disaster.
We have India and Pakistan hoarding almost 300 nuclear missiles ready to go, and they detest each other for sound, well-thought-out national and religious reasons.
And the midterm elections are starting soon. Prepare for your TV to turn into a political shill with self-adjusting volume.
Isn't that better? We took those sissy interest rate worries and put some hair and fangs on them. When it comes to worrying, my motto is go big or go home.
That's because I've been in this game for over three decades, and I've profited handsomely through some of the most worrisome times in the history of the United States…
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About the Author
Tim Melvin is an unlikely investment expert by any measure. Raised in the "projects" of Baltimore by a single mother, he never attended college and started out as a door-to-door vacuum salesman. But he knew the real money was in the stock market, so he set sights on investing - and by sheer force of determination, he eventually became a financial advisor to millionaires. Today, after 30 years of managing money for some of the wealthiest people in the world, he draws on his experience to help investors find "unreasonably good" bargain stocks, multiply profits, and build their nest eggs. Tim tirelessly works to find overlooked "hidden gems" in the stock market, drawing on the research of legendary investors like Benjamin Graham, Walter Schloss, and Marty Whitman. He has written and lectured extensively on the markets, with work appearing on Benzinga, Real Money, Daily Speculations, and more. He has published several books in the "Little Book of" Investment Series and a "Junior Chamber Course" geared towards young adults that teaches Graham's principles and techniques to a new generation of investors. Today, he serves as the Special Situations Strategist at Money Morning and the editor of "Max Wealth" and Heatseekers.
My focus is on penny stocks
Great insight for a small investor like me seeking income.