No Escape from Low Rates
Low interest rates depress expected returns for both stock and bond investors.
A version of this article previously appeared in the October issue of Morningstar ETFInvestor. Click here to download a copy.
Interest rates influence the prices and expected returns of nearly every investment. Low and falling rates tend to inflate asset prices but reduce their future returns. That makes investors feel richer today but increases the challenge of growing wealth and generating income in the future. Rising rates have the opposite effect.
Alex Bryan does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.