Comfort Zone Investing: What Lies Ahead For 2011 ... Maybe

Filed under: General Electric (GE), Coca-Cola (KO), Ford Motor (F), General Motors (GM), International Business Machines (IBM), Citigroup Inc. (C), Comfort Zone Investing

Nobody knows what the future holds. But there are a few things shaping up that suggest certain things will most likely happen. Here are some of the major ones.

Interest Rates: Low at the beginning of the year, then headed higher for a long time. If you have an adjustable rate mortgage and you're still paying it, it's the perfect time to get it refinanced, if you can qualify. Interest rates are definitely going up; it's just a matter of when. As long as the Fed is pumping money in (QE2 is targeted with $800 billion .... with the possibility of more behind it), rates will stay low, unless investors think inflation will get way out of hand. Then rates will go higher no matter what the Fed does as investors sell longer term bonds to beat the coming inflation. Initially, rising interest rates will be bullish as they are a precursor to a healthy economy. But that bull will morph and become a bear when rates start jumping as the Fed tries to get ahead of inflation. Tricky business. Investors will do well to have floating rate assets and fixed rate liabilities.

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Comfort Zone Investing: What Lies Ahead For 2011 ... Maybe originally appeared on BloggingStocks on Sat, 11 Dec 2010 10:30:00 EST. Please see our terms for use of feeds.

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