Updated: May 25, 2016
Stop me if you’ve heard this lie before…
“Higher rates are going to hurt high yield stocks.”
It’s a lazy blanket statement that, for the most part, just isn’t true. And that presents great opportunity for us income investors with a contrarian mindset. We can look past the first-level headlines to the second-level facts – and build a portfolio that will actually outperform after summer’s rate hike.
About that hike – it’s not a foregone conclusion, but the “smart money”, or traders who actually place money on the various likelihoods, believe there’s a 53% chance of a boost by late July:
Fed Fund Futures Implied Probabilities for July 2016
That’s a big shift from a month earlier, when traders were only pricing in an 11% chance of a hike by then.… Read more