I know most of us were told that stocks usually go down when interest rates go up… I mean, it’s just Economics 101.
But fortunately, that’s not always true…
There’s a specific group of stocks that thrive in an economic environment like we have now, where the Federal Reserve claims it’s going to take aggressive action to raise rates several times in one year.
I’m not exactly sold on this Fed… But short-term rates have been rising the past few months…
So it’s a good idea for us to start putting stocks that trade higher when interest rates rise in our portfolios…
2 Stocks That Trade Higher When Interest Rates Rise
I’m personally a bit skeptical of this Fed because it hasn’t shown much urgency to the current economic emergency — inflation — so far.
It could be because raising rates aggressively might derail much of what it has spent building with billions and billions of dollars over the past few years.
But only time will tell…
So for now, Charles Schwab Corp. (NYSE: SCHW) is the first stock that’ll trade higher when interest rates rise.
While commission costs of buying and selling stocks basically disappeared over the past few years, SCHW decided to dip its toes into banking…
The company now makes a huge chunk of its profits from interest on money being deposited into its banks.
So if interest rates surge, SCHW will benefit in a major way.
It’s five-year earnings growth is already 150% — anything over 100% is extremely bullish and stable, by the way.
I have a profit target of $105 per share on SCHW over the next three months if the Fed continues to put pressure on stocks with the threat or promise of raising rates too much too fast.
Check out my short video below to learn more about SCHW and the stocks that trade higher when interest rates rise.
Don’t forget to like and subscribe to our YouTube channel if you haven’t already so you can be notified as soon as we post our next video and see what other trade opportunities we’re paying close attention to!
P.S. The stock market’s been absolutely crazy lately…
In fact, it’s been so volatile I decided to reach out to the best gap trader I know to get the inside scoop on her 120 Rebound strategy.
I don’t usually trade like this, but it might actually be one of the most predictable setups I’ve ever seen…
It’s all thanks to spotting stocks that tank overnight, and then riding them back up in 120 hours or less!
With the markets all over the place right now, the timing couldn’t be better.
