Please see below an article from A.J. Bell, which was received late yesterday (07/10/2021) afternoon which cover their thoughts on what effect rising bond yields will have on stocks:
As you can see from the above, rising interest rates aren’t necessarily a bad thing for cash assets and banks, although, this will lead to debt becoming more expensive. I believe that this will be something the UK Government will be reluctant to implement until absolutely necessary. Cheap debt is what has helped the Government support the country financially during the Covid pandemic.
Another thing to note is that if interest rates do increase, growth stocks could become less attractive as investors seek investments that have a higher equity risk ratio and may generate higher investment returns.
For the majority of our clients, the Fund Managers will switch between sectors on your behalf.
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Please keep safe and healthy.
Carl Mitchell – Dip PFS
Independent Financial Adviser