By Ben Carlson, CFA
A Wealth of Common Sense
Interest rates do matter. They provide a hurdle rate, discount rate, benchmark, alternative to risk assets, however you want to look at it. But, they aren’t the be-all, end-all to the markets some would have you believe.
There are so many other factors at play that determine why investors do what they do with their money—demographics, demand, risk appetite, past experiences, and a whole host of psychological and market-related dynamics.
Could there be a psychological impact if rates rise from here, or fall from here, or go nowhere for years on end? Of course!