This week I am sharing an article from Yahoo Finance titled Warren Buffet: I Still Like The Stock Market Because Of The Bond Market. In this article, author Myles Udland, shares a comment that Buffett made to CNBC. Buffett said, “Stock valuations makes sense with interest rates where they are.” At first glance, it seems like Buffet is saying that stocks are good to buy today because of low interest rates but maybe aren’t good to buy if interest rates rise. However, it would be a mistake to assume that.
Essentially, what Buffet says is that the “value of stocks” looks great in a low interest rate environment. He didn’t say that you shouldn’t buy them in a high interest rate environment. In fact, one of the MOST IMPORTANT quotes that Buffett shared in this article is the following:
“I don’t try to guess the market.”
Many people (even so-called experts) will tell you that the stock market is over priced, interest rates are too low, interest rates are going to rise, etc… These type of comments are often times made with the underlying premise that now is not a good time to invest. These “experts” continue to defy the research that shows the futility of trying to predict when to get into or out of the market. And if Buffett says to not try to guess the market, then that is good enough for me.
I hope you enjoyed this weeks’ Articles of Interest. Please feel free to share any comments, questions, or experiences you have below.
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