The Greatest Investments for Rising Curiosity Charges

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While there have been a lot of headlines and hand-rings about inflation recently, interest rates, which tend to rise with inflation, have remained tame so far. Interest rates on everything from savings accounts to mortgages are still near historic lows.

The question is, how long can that take?

One line of thought advocated by the Federal Reserve has been that inflationary pressures, now evident in higher prices for everything from used cars to factory wages, are “temporary” and will begin to ease as pandemic labor and supply chain shocks wear off.

Others think inflation is here to stay. That could have a negative impact on both stocks and bonds. That’s because the fate of stocks and bonds, as well as many other investments, is closely tied to interest rates.

When interest rates are low, as they have been for a decade, companies pay less on loans and can spend more, which increases profits. When interest rates rise, the opposite occurs: higher borrowing costs, lower profits, lower stock profits.

Rising interest rates also mean that safer investments like savings accounts and government bonds are becoming increasingly attractive compared to stocks, causing money to leave stocks and prices to fall.

What is an investor to do? That’s what this week is “Money!” Podcast is about. We will examine specific investments that can not only survive but thrive in environments where interest rates are rising.

As always, my co-host will be financial journalist Miranda Marquit. Producer and new investor Aaron Freeman listens and sometimes helps.

Sit back, relax, and listen to this week’s “Money!” Podcast:

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