I’m on vacation this week but I won’t leave you empty-handed. One of the things I monitor closely is what the Federal Reserve does at each of their FOMC meetings. As a matter a fact, I have these meetings in my own personal calendar and I will always take my lunch break around watching CNBC on the day the Fed is holding their FOMC meetings.
How Interest Rates Impact Investments
Many people know that when the central bank raises interest rates that borrowing costs go up. They go up for mortgages, they go up credit cards and most loans across the board but few understand the impact on interest rates on investments.
I came across this video from Viktoriya Media discussing the pros and cons of two popular investment ETFs: SCHD and JEPI. In this video, Viktoriya does a great job in explaining how interest rates impact the returns of these two popular ETFs and which one you may want to invest in depending on how you feel interest rates are moving.
Viktoriya Media -SCHD Dividend ETF will LOSE to HIGH Income ETFs in 2024 (JEPI)
If you are invested or plan to be invested in either SCHD or JEPI, the video is a much wise otherwise watch it for how central banks interest rates play a role in the potential prospect of these ETFs.