Markets reversed sharply this morning as interest rates rose. The US Dollar strengthened in response to rising rates. There has been a very strong correlation in the falling dollar and rising asset prices. As the dollar fell, stocks, bonds, gold and other hard assets rose in value. Rising rates have the potential to cause the "PERFECT STORM" in your investment portfolio as most asset classes may fall. Naturally, bonds fall as rates rise, but as higer rates invite investors to again move into the dollar, the stock market, oil and gold may fall as well. Those who are not using all of the risk management tools available may find themselves just as they were last year, bailing out of the stock market, trying to preserve whatever is left after a number of recent market crashes.
It's not only me that has concerns about the current situation. Dr. Roubini, in an interview today with business channel CNBC commented that the dollar won't continue to fall forever and when it does start to strengthen, there will be a collapse in asset prices across the globe.
I'm sure that you've seen stories about how some people made BILLIONS of dollars profiting from the recent market collapse. Don't be a hostage to the whims of the market. You can control your profits in any kind of market through proper risk management techniques. To learn more about how you can protect yourself from disaster and position yourself for profits in the future, feel free to e mail me.
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