Thu. Sep 19th, 2024

The Fed raised rates for the fifth time this year and today was a 75 basis point hike bringing the rate up to 3 to 3.25 range. The Fed plans on raising rates until it gets to 4.6% sometime in 2023. Ouch!

The stock market fallout took a while to hit but by the end of the day the indexes all dropped with Dow dropping 500 points. Ouch!

It can be expected that mortgage and credit card interest rates will CLIMB from this action over the next few months. We can also expect real estate purchases to become more expensive and real estate prices to drop until a normalization occurs over the next 16 months.

What is the best way to invest in this new paradigm? We have taken put option positions in XHB and other home builder stocks, this is to make money on the way down for these equities and securities.

We have also been snapping up dividend stocks that we intend to hold long term (10+ years) because they are going on “sale” day after day. The key is to shop prudently and save some cash for the really big deep discounts that will be coming over the next 12 months.

Additionally, we have started buying high interest rate T-Bills and US Treasurys because their rates are very attractive approaching 3% for T-Bills and 4% for Treasurys.

Stay tuned and stay solvent…