Fear of an Interest Rate Hike Has Caused The Stock Market To Go Down a Lot Recently, Should I Be Worried?

In Short

I don’t think you should be worried. I think it’s a temporary fear pit and it will quickly stabilize.

Nothing Has Actually Happened Yet

The market declined on the fear of an interest rate hike, but no hike has actually occurred yet. It may happen in the future, it might not, but currently that fear is not based on anything. Similarly to Brexit, the market took a dive because people are uncertain of what the future will bring and thus overstates the danger.

An Interest Rate Hike Might Not Actually Hurt the Stock Market

Traditionally it is thought that an interest rate hike hurts corporate growth for it makes it more expensive to borrow, it makes existing debt more expensive, and incentivizes potential customers to save more of their money (thus not buying their products). However, in 2006 an interest rate hike actually increased the stock market. Companies saving money I believe enhanced their financial stability and thus improves their ability to invest in the future. The point is that the future is uncertain and how things respond to future events is difficult to predict.

Falls are Not a New Thing

The stock market moves in cycles. Sometimes it is moving up and sometimes it moves down. Overall it has been moving up. The stock market has fallen before, sometimes by a lot, and it has always recovered. I don’t see why this time should be any different.

Fee Structure

Rate Assets Under Management
1.44% Below $125,000
1.00% Between $125,000 and $750,000
.85% Between $750,000 and $1,250,000
.80% Between $1,250,000 and $1,750,000
.75% Between $1,750,000 and $2,500,000
.70% Between $2,500,000 and $3,250,000
.65% Between $3,250,000 and $4,250,000
.60% Above $4,250,000

A single rate is applied to the entire account. So a person with a $750,000.01 account pays less than a person with a $750,000 account. I will waive personal tax return fees for accounts over $1 million. For accounts that are above $5,250,000, we’ll need to discuss a custom rate.

As I’m writing these to help my readers, I would be very appreciative of any input in regards to what I should write next. If you want me to write about a particular topic, please contact me. If you would like to submit a post to my blog, please contact me.

If anything that I mentioned above interests you, please consider downloading my free e-book. The book contains my thoughts on investment management and some information that I think everyone should know. You can also download it below.

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Questions for the comments

Did my explanation make sense? Do you agree or disagree with what I said?

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