After talking about it for 2 years, the US Federal Reserves (Fed) is finally about to raise interest rates. For a good part of these 2 years, I had not been too concerned about interest rate rises and was happy to pick up REITs beaten down by interest rate worries. It was 2 weeks ago that I realised that while interest rate rises were not too worrisome, things do not work in isolation. Here are my thoughts and actions taken in response to interest rate rises and their secondary effects.
Wave 1: US Interest Rate Rises
As mentioned, interest rate rises should not be too worrisome. My guess is that US interest rate should not rise to more than 0.75% by the end of this year and 2% by the end of next year. By pre-Global Financial Crisis standards, 2% interest rate is considered very low. Thus, I am ...
...