Natural Resource Stocks

Overview

In the United States, low interest rates resulted in more money supply on the market, which in turn pushed up the prices of consumer products.  For example, people in California, as well as the rest of 49 states in the United States might have noticed the rising prices of real estate houses.  Teenagers and high school students probably remember when movie ticket prices were 50% of what they are now.  Inflation, not deflation, will play an important role for the US economy in the next a few years.

When inflation becomes a problem, the real value of dollar will drop accordingly.  Then, the central bank of the United States, that is the Federal Reserve, in turn will keep inflation down by raising interest rates.

The rise of interest rates is not good for equity markets,   When interest rates go up, stocks go down or move flat because of the decrease of money supply.  However, some stocks might do well.  For example, foreign natural resource stocks will benefit from the rise of world wide commodity prices.

To learn about an investment firm we have found that specializes in trading directly in international markets, please contact our investment advisors.