• Skip to primary navigation
  • Skip to main content
Mullooly Asset Management, Inc

Mullooly Asset Management

Fiduciary Fee-Only Financial Planner | Investment Advisor in Wall, NJ

  • Services
    • Wealth Management
    • Financial Planning
    • Retirement Planning
    • Investment
    • Estate Planning
  • Our Fees
  • About
  • 732-223-9000
  • Schedule A Meeting

Services

  • Wealth Management
  • Financial Planning
  • Retirement Planning
  • Investment
  • Estate Planning

Quick Links

  • About
  • Our Fees
  • Videos
  • Podcasts
  • Blog

Support

  • Contact
  • Client Login
  • Pay Bill Online
  • Form CRS
  • Our Process
Follow us on Facebook
Follow us on Linkedin
Follow us on Twitter
Watch On Youtube

Let’s talk

Are Rising Interest Rates Always Bad for Stocks?

July 30, 2014 by Thomas Mullooly

https://media.blubrry.com/invest/p/content.blubrry.com/invest/Are_Rising_Interest_Rates_Always_Bad_for_Stocks_July_2014_Podcast.mp3

Subscribe: RSS

Many people assume that rising interest rates must be a bad sign for stocks. It’s not nearly that simple! Tom and Brendan discuss this on the weekly Mullooly Asset Management podcast.

A recent article by Barry Ritholtz (which you can find here: http://www.ritholtz.com/blog/2014/07/rising-rates-unliklely-to-kill-this-bull-market/) covered the effect rising rates have on the stock market. Its focus was the likelihood of the current bull market being stopped by rising interest rates.

The old rule is that when the Federal Reserve is cutting rates, you want to own stocks. When the Federal Reserve is raising rates, get out of their way (and the market). With quantitative easing being tapered, should investors be worried about interest rates affecting the stock market soon? Probably not.

The first thing to remember is that the stock market doesn’t always do what people expect it to.

Another valid point raised by Ritholtz is that when inflation is high, and rates are going up from those already elevated levels, we’ve generally seen a negative impact on stocks. However, when inflation is low and rates increase from those low levels, the impact on stocks is generally positive.

Currently, we’re experiencing low inflation and low interest rates. If history holds true, the first few rounds of rate increases should not harm the markets overall. A few sectors may underperform and others may outperform, but rising rates are a sign the economy is growing. That’s good for stocks!

Our opinion at Mullooly Asset Management is that the first two rounds of quantitative easing were essentially triage for the banks. The focus was to keep the banks open and running. That meant economic growth, lending, and the individual became secondary concerns of the Fed. The third round of quantitative easing was meant to spur the economic growth. Quantitative easing takes a long time to filter into the economy and we may just be starting to see its effects now while we near its end.

So are rising interest rates always bad for stocks? Not really. As always we’ll continue to monitor the charts and let them dictate our gameplan.

Never miss a post...and we deliver!

newsletter mailman

Get our updates delivered right to your inbox. Sign up today!

Success! Now go and check your email to confirm your subscription.

There was an error submitting your subscription. Please try again.

We won't send you spam. Unsubscribe at any time. Powered by ConvertKit

Filed Under: Podcasts, Stock Market Comments Tagged With: interest rates, stocks

About Thomas Mullooly

Thomas Mullooly is owner and founder of Mullooly Asset Management, Inc. In 2002 Tom opened Mullooly Asset Management, a fee-only investment advisory firm. As an investment advisor, and not a broker, Tom works strictly for his clients. With the help of point and figure charting, Tom builds a realistic game plan for clients.

1971 State Route 34, Suite 102
Wall Township, NJ 07719

  • 732-223-9000
732-223-9600
  • support@mullooly.net
  • Services
  • About
  • Our Fees
  • Contact
  • Form CRS
  • Videos
  • Podcasts
  • Blog
  • Client Login
  • Pay Bill Online
  • Our Process

The information on this website and blog do not involve the rendering of personalized investment advice. A professional advisor should be consulted before implementing any of the options presented. None of the content contained in this website should be construed as legal or tax advice. Always consult an attorney or tax professional regarding your specific legal or tax situation.

© 2022 Mullooly Asset Management Inc. All Rights Reserved.

  • Privacy
  • Disclosures and Legal Disclaimers
  • Privacy
  • Disclosures and Legal Disclaimers

© 2022 Mullooly Asset Management Inc. All Rights Reserved.