The Feds reduced interest rates this week by 0.25%. The rate reduction not only reduces repayments on variable rate loans; but also affects yields on investments.
Seniors are bing told to re-evaluate their investments to ensure they are yielding enough. In the past retirees would take on more risk with their investments. This has paid off with the long term bullish market. However, economists are warning that when this gives out these yields will fall, and high risk portfolios will be at particular risk.
“The stock market has been hitting all-time highs, but the reason we’re facing lower interest rates is because the economy seems to be slowing down and we’re heading toward a recession,” said Leon LaBrecque, certified financial planner and chief growth officer at Sequoia Financial Group in Troy, Michigan.
Read More: CNBC