E The Fed Reserve Rate Hike And Beyond

For now, I think we will have to pick our spots for investing and be patient. 

Below, I have listed a few ideas that I am following and starting to execute.

INVESTMENT IDEAS 

Raise in long-term interest rates- This is something I have started to position client portfolios in by shorting the 10 Year Treasury (anticipating a fall in the price level). The US 10 Year Treasury Yield has been hovering at all time lows. Much of this is due to the strengthening in the US dollar. However, this low level in interest rates cannot persist for too much longer. 

Declining Euro- As the ECB looks to stimulate the Eurozone economy, they are pumping more monetary stimulus into the economy, very similar to what the US did a few years ago. This will put downward pressure on their currency. It will also create a very positive environment for European equities, which is something else I will evaluate for client portfolios.

Kinder Morgan (KMI)- Has been in the news quite very recently for their massive debt issues. They recently cut their dividend and the stock has fallen by over 60+. I am still watching Kinder for now, but they pay a decent dividend and are the biggest operator in their space. 

Stay tuned for new developments as we move into the new year.

Have a great day,

Camari 

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Comments

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Kurt Benson 4 years ago Member's comment

$KMI has not been doing well for me. Do you think it will rebound soon?

Camari Ellis 4 years ago Author's comment

I think KMI is a long term play. If you have a short term focus it may not work for you.

Kurt Benson 4 years ago Member's comment

Thanks for the reply, better late than never.

Kushal Kumar1 4 years ago Member's comment

There ought to have been no occasion for Fed to go in for interest rate hike in December 2015 after the last hike in 2006. Even though there may likely arise some inspiring strains in some countries or regions soon after the Fed rate hike, it could likely shape up as up and down for some time to take a sharp surprising declining trend around mid- February 2016 and after. So a cautious approach could be useful.

Gary Anderson 4 years ago Contributor's comment

If people were not in so much debt in dollar denominated loans, a little rise in rates would be good. It would be a sign of prosperity. Unfortunately, long bonds have so much artificial demand that they may not go up much in yield even in times of prosperity.

Camari Ellis 4 years ago Author's comment

I would agree about being cautious

Cynthia Decker 4 years ago Member's comment

I agree, these are sound investment ideas. Thanks for sharing.

Camari Ellis 4 years ago Author's comment

Thanks for reading Cynthia