March 15, 2022

The Best Course Of Action To Take With Higher Interest Rates

Here we go…

In the days ahead, the Federal Reserve is set to hike interest rate by a quarter-point.

All in an effort cool red-hot inflation.

In fact, “The economic outlook supports the Fed’s current plans to boost the federal funds rate in March and to begin to reduce their balance sheet over the summer,” wrote David Kelly, chief global strategist for JPMorgan Funds, as quoted by CNBC. 

What matters most now is what comes next.

Right now, the central bank is almost certain to hike rates this week.  

What we’re waiting on is some indication as to how quickly the Fed will raise rates to prevent soaring inflation—especially now. 

On one hand, we have soaring inflation.  On the other, there are concerns about a potential slowing in the economy, coupled with sky-high oil and energy inflation.

The Fed has to be careful not to rock the boat too much.

So, what’s the best course of action to take with higher interest rates?

One way is to invest in higher yielding stocks that are outperforming the S&P 500, and are highly likely to withstand higher rates.

Look at Golden Ocean Group Ltd. (GOGL), for example.

Income Confidential brought GOGL to the attention of subscribers in July 2021, as it traded at $9.30.  It’s now up to $11.40 – and rising – with an annual dividend yield of 32.2% to boot.

As Income Confidential explained at the time:

“Demand form emerging market countries, the pandemic induced shortages combined with the increasing online ordering of products from all over the world, ha put the shipping business front and center. Driving a lot of that demand are commodities needed to run emerging markets that are producing goods and services around the world. Iron ore, coal, bauxite. That’s where Golden Ocean comes in.”

So, it came as no surprise earnings have been solid.

As noted by the company, “Net income of $203.8 million and earnings per share of $1.02 for the fourth quarter of 2021 compared with net income of $195.3 million and earnings per share of $0.97 for the third quarter of 2021. Adjusted EBITDA of $243.5 million for the fourth quarter of 2021, compared with $229.7 million for the third quarter of 2021.”

That’s just one higher yielding stock that’s outperforming the S&P 500, and is highly likely to withstand higher rates.

We’ll share another one from Income Confidential tomorrow morning.

Also, as I mentioned on Monday:

Wealthy Investor to Focus on Inflation, Interest Rates and Recession

Jeff is working right now on an additional first issue special report for Wealthy Investor members which will focus on stocks and ETFs which outperformed during that last recession, the last run of increases in interest rates (2016-18), and stocks which can beat inflation.

This report will be released later this week along with the Metaverse report and a new Wealthy Investor Member’s Website.

If you’re not a Wealthy Investor member, stay tuned; we’ll open Wealthy Investor in the next week for new members.

Stay safe out there…

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