Today the Dow Jones Industrial Average closed at 17,055. It is 13 points away from breaking its record high set on July 3rd. There was favorable news that Citigroup agreed to a $7 billion offer with the US Government. There is also news that the economy in Europe is sluggish and calls there are being made for more stimulus measures.
Of course this market will correct at some point. For now, the US stock market has the best risk/return ratio for investors. Here are a few reasons why interest rates will not be going up anytime soon:
1. Most economies across the world are still sluggish.
2. The US is the best place for investing in safe haven assets. As long as foreign buying of US Treasuries continues the rates will remain low.
3. The Fed and US Treasury continue their cycle of repaying old debt with more new debt. History may reveal this as the greatest pyramid scheme in history. They will not be the ones to orchestrate a rate hike knowing that their old debt will be paid off at higher rates. So far it has been working for them.
There are still tremendous investing opportunities in this market. Particularly the dividend paying blue chip stocks. Many of these companies are paying a 3% dividend and they are more stable than most banks.
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