Interest Rates Going Up 😲 Where to Invest? Banks? Commodities? | Summary and Q&A

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February 7, 2022
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Learn to Invest - Investors Grow
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Interest Rates Going Up 😲 Where to Invest? Banks? Commodities?

TL;DR

Analyzing the effects of previous federal reserve interest rate increases on investments like banks, commodities, and stocks can help inform future investment strategies.

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Questions & Answers

Q: How did banks perform during the periods of interest rate increases?

Banks had a decent performance, but they fell short of the broader S&P 500, gaining around 8.5% compared to the S&P 500's 11%.

Q: Did commodities like gold and silver fare well during interest rate increases?

While commodities, including gold and silver, posted gains, they were only slightly up. The Bloomberg commodity index showed a 12% gain, but gold and silver had little movement.

Q: How did different stock classes perform during the financial crisis and subsequent rate cut?

Gold emerged as the best performer during the financial crisis, with a return of about 110%. However, leading up to the crisis, banks performed well, gaining around 30%, while all stock classes saw gains.

Q: What were the best performing asset classes during the most recent rate hike increase?

The S&P 500 performed the best, followed by all stocks in general. Banks were not far behind, while commodities had a lower performance.

Summary & Key Takeaways

  • The video examines previous periods when the Federal Reserve increased interest rates to determine the best-performing investments during those times.

  • Examples include banks, commodities like gold and silver, and different stock classes such as large-cap, small-cap, and mid-cap stocks.

  • Overall, the S&P 500 performed well in each period, while banks and commodities had mixed results.

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