Unlock Premium Data: Up to 50% Off InvestingProCLAIM SALE

How Interest Rates Affect Stocks

Published 04/03/2022, 23:17
Updated 05/03/2022, 00:10
How Interest Rates Affect Stocks
ETH/EUR
-
BLKCF
-
CRCW
-
ETH/USD
-
ETH/USD
-
ETH/EUR
-
ETH/JPY
-
ETH/GBP
-
ETH/JPY
-

The concept of interest is as old as time. Well not quite…

The first written evidence of compound interest dates roughly 2400 BC, where an annual interest rate of 20% helped fuel the development of agriculture and was important for urbanization.

The concept is simple - lending resources for a desired return which ideally leads to an overall increase in production. Early implementations of interest rates are also tied to a concept that acquired seeds and animals could reproduce themselves, which could justify charging interest.

In modern times, we have our most direct relationship with interest in form of the anemic amount that big banks offer us in our savings account…0.05%…

This, along with collapsing US 10yr treasury rates has led investors to seek other forms of “yield” out in the marketplace.

If you’re part of the online crypto community, there is now an incredibly exciting opportunity in the space called staking. It is the concept of “lending” out to certain parties in order to earn a rate of return.

Some of the percentages being earned are absolutely eye-popping. Which usually means that something is too good to be true. So we know this comes with risk…

Last week, we covered the revolution of the DeFi movement. This week we will first talk about the role of income in a portfolio, the broad lack of yield in the current economic environment, and then we will dive into an interesting “product feature” of the crypto space: staking.

This week, in

  • Traditional Portfolio Mix

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.