When interest rates rise..

[simon_84]

This year's inflation seems to be lower though.......

because SGD appreciate.

 

[Mecisteus]

Good news. Fed thinks the economy is getting stronger so they are starting to raise interest rates sooner than later. We should see some short term and knee jerk reactions from panic selling. But I take this as a positive sign to stocks in the mid and longer term.

 

[cookieemonsterr]

6 months to rise in rates possibly. Interesting times ahead. The end of easy money and probably a good time to get in is on the cards.

I am curious what the reduction of easy money would have on a supposedly improving economy.

 

[coolhead]

Good news. Fed thinks the economy is getting stronger so they are starting to raise interest rates sooner than later. We should see some short term and knee jerk reactions from panic selling. But I take this as a positive sign to stocks in the mid and longer term.

I agree. I see it as good news too. It is an appropriate time to set the market expectation right. But this early announcement seems to me that we know that the FED knows that we know there is a stock market bubble due to easy credit in low interest environment, that it's a news to come sooner or later. If it means supporting the stock market on a more 'sound' basis, i gladly welcome it and the 1 year timeframe will give companies the maximum opportunity to exploit this low interest rate environment and delay the cost of borrowing interest rates.

 

[Motherliquor.P]

Finally the interest rates will rise
No more cheap credit

 

[SpeedingBullet]

Finally the interest rates will rise
No more cheap credit

Boooo.. my REITs need that kool-aid :<

 

[wahkao3]

Boooo.. my REITs need that kool-aid :<

u didnt see this coming meh?
i saw it possibly coming so i stay off REITS

 

[SpinFire]

Boooo.. my REITs need that kool-aid :<

I think REITs has priced in the future interest rate rise. Even after this month's FOMC when Yellen signaled that interest rates will be raised earlier, the stock prices of REITs remained stable.

Looking forward to Lotte REIT

 

[rainbowman]

Thank you Yellen ; the Kopi-o downstairs now costs $1.10...let's bring it back to the pre-$1.00 level.

 

[simon_84]

Boooo.. my REITs need that kool-aid :<

no issues if you buy when sti was below 3000 after cny but if you're like me bought last year prior to may, of course be prepared to stomach some paper loss.

managed to average down CMT and FCT recently.
those that you find it hard to average down, maybe can consider cutting loss after collecting a few periods of dividends as i did so with MCT, MIT and cache.

 

[SpeedingBullet]

u didnt see this coming meh?
i saw it possibly coming so i stay off REITS

No I didn't see it coming, god my foresight is as good as a hobo, yours must be that of LKY's. No wonder you're so satki. I'm simply amazed!

I think REITs has priced in the future interest rate rise. Even after this month's FOMC when Yellen signaled that interest rates will be raised earlier, the stock prices of REITs remained stable.

Looking forward to Lotte REIT

Well... REITs historically performed well when the Fed Funds Rate was on its upward march (04-07)

Thank you Yellen ; the Kopi-o downstairs now costs $1.10...let's bring it back to the pre-$1.00 level.

not gonna happen :<

no issues if you buy when sti was below 3000 after cny but if you're like me bought last year prior to may, of course be prepared to stomach some paper loss.

managed to average down CMT and FCT recently.
those that you find it hard to average down, maybe can consider cutting loss after collecting a few periods of dividends as i did so with MCT, MIT and cache.

Ok I better say that my post u quoted was just a friendly joke.

In all srsness I did buy wayy back, would add more if it drops below my buy price.

 

[chewjekhui]

No I didn't see it coming, god my foresight is as good as a hobo, yours must be that of LKY's. No wonder you're so satki. I'm simply amazed!


Well... REITs historically performed well when the Fed Funds Rate was on its upward march (04-07)



not gonna happen :<



Ok I better say that my post u quoted was just a friendly joke.

In all srsness I did buy wayy back, would add more if it drops below my buy price.

Can you just quote stock that has done well from 2004-2007 when fed's interest rate rose? I want to find out more on where you got this information

 

[Shiny Things]

Can you just quote stock that has done well from 2004-2007 when fed's interest rate rose? I want to find out more on where you got this information

DBS: +38% from Jan '04 to Dec '07.
Singtel: +60% over the same time period.

If you want to go over to the USA, where rates were rising:

Microsoft: +33%
P&G: +50%
ExxonMobil: +137%
US Steel: +235% (for a steelmaker! I know, right?!)

Basically stocks don't usually keel over until a long way into a rate-hike cycle. In the US at least, the rule is that you don't need to worry about selling stocks until the 2s10s Treasury spread flattens to about 50bps (it's 230bps right now).

 

[chopra]

Can you just quote stock that has done well from 2004-2007 when fed's interest rate rose? I want to find out more on where you got this information

As pointed out by Shiny.

Probably you meant SUDDEN spike in interest rate. That is another ball game altogether....

 

[Mecisteus]

Can you just quote stock that has done well from 2004-2007 when fed's interest rate rose? I want to find out more on where you got this information

a stock quote is not representative or conclusive of the stock market performance in general.

just check the world market index within this period.

 

[rokawa2]

i dun really bother looking at advertised inflation.
i see supermarket goods price directly.

Many stuff price has gone up.

Dun even need incude cigarettes and beers.
i dun drink or smoke, but i can feel the pinch.
I mean ppl feel the pinch i can feel it too although im not actually affected.

some stuff like milkpowder price has gone up... then after a while price remain same and they switch "packaging" 200g smaller.
soon all suppliers will remarket to 1.6kg as the new norm (maybe).

inflation will always goes up.
becoz there is increasing demand.
demand comes from an increasing population.
which comes from either a target or reference or whatever they wan call it.
6.9m

 

[SpeedingBullet]

Can you just quote stock that has done well from 2004-2007 when fed's interest rate rose? I want to find out more on where you got this information

Like the rest said, don't even need to quote a specific stock. I can just quote u an entire index

Just go Google it, you can find the information. It's not that hard

Usually when interest rates rise it means the economy is doing well. It's only when the short-end of the yield curve ticks higher than the longer end we have a problem.

 

[Shiny Things]

a stock quote is not representative or conclusive of the stock market performance in general.

just check the world market index within this period.

Okidoke.

From Jan '04 to Dec '07:
SPX +30%
FTSE +35%
Nikkei +40%
STI +100%
All Ords +100%

Moral of the story: tightening cycles are not necessarily bad for stocks!

 

[chewjekhui]

DBS: +38% from Jan '04 to Dec '07.
Singtel: +60% over the same time period.

If you want to go over to the USA, where rates were rising:

Microsoft: +33%
P&G: +50%
ExxonMobil: +137%
US Steel: +235% (for a steelmaker! I know, right?!)

Basically stocks don't usually keel over until a long way into a rate-hike cycle. In the US at least, the rule is that you don't need to worry about selling stocks until the 2s10s Treasury spread flattens to about 50bps (it's 230bps right now).

Correction, i mean REITS shares. Was the SG REITS share mkt so active then?

 

[hindsight]

Okidoke.

From Jan '04 to Dec '07:
SPX +30%
FTSE +35%
Nikkei +40%
STI +100%
All Ords +100%

Moral of the story: tightening cycles are not necessarily bad for stocks!

That is only because stocks had been severely beaten down following the dot com crash, 911 and SARs (applies to STI). They were dirt cheap then.

Stock valuations today are far more expensive (following the massive ramp up from 2008-2013) than they were back in 2003-2004, I think many people have overlooked this fact.