The Best Stocks For Rising Interest Rates

Despite the roaring bull stock market, investors remain fearful of rising interest rates. It is no longer a question if the Fed will increase interest rates, it is a question of when. The central bank has hinted that rates may start to increase in the spring of 2015.

This has resulted in investors searching for the best investments during rising interest rate environments.

Believe it or not, small cap and penny stocks have been proven to outperform when interest rates are climbing!

I realize this doesn’t seem to make any sense, but provided the fact that interest rates are generally increased during times of economic growth, the fact starts to make sense.

In addition, small cap companies are often innovative, the shares often sell for less than larger company’s allowing the investor to purchase more shares with the same amount of capital, and small caps can be acquisition targets much easier than large cap companies.

Uber investor and Chairman of Vanguard, John Bogle, conducted a study proving that small cap stocks outperform during rising interest rate environments.

This means that the smart place to be is in the best penny stocks when rates start to increase.

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SOURCE:

http://tradingtips.com/daily/penny-stocks/best-stocks-rising-interest-rates/