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The Best Way to Take Advantage of Today's Negative Interest Rates

By Dr. Steve Sjuggerud
Monday, February 8, 2016

For the first time in history, the world's third-largest country just cut interest rates below zero.
The country isn't important. What's important is the trend – and it's a trend we need to take advantage of.
Below, I'll show you exactly what you can do to make this unprecedented act work in your favor...
"Almost a quarter of the world's gross domestic product (GDP) now comes from countries with negative rates," According to an article in The Economist magazine this week.
In Sweden, for example, when you put your money in the bank, you don't EARN interest anymore. Instead, you have to PAY more than 1% a year just to keep your money in the bank.
Can you believe it? THAT is what negative interest rates look like.
About two years ago, I wrote a DailyWealth essay called "NEGATIVE Interest Rates Are Coming." I said:
When you think about it, the immediate results of negative interest rates are pretty obvious...
•   "Savers" get clobbered. Retirees lose money on their savings. It's terrible.
•   People borrow money. Hey, it's "free." Why not get some?
•   Asset prices go up. What do people do with the free money? They buy stuff.

Since then, those things are exactly what has happened. (That's what happened until the Federal Reserve RAISED interest rates recently, which caused the recent selloff in stock prices. But the Fed is likely done raising interest rates this year.)
So... what should you do to take advantage of it?
Just about all of us should start right at home...
Right now, the current national interest rate on a 15-year mortgage refinancing is 2.84%, according to
U.S. housing is cheap (relative to the rest of the world, and relative to its own history).
House prices had their worst crash in generations, and now they're recovering. This is the safest moment.
Meanwhile, mortgage rates are not far from record lows. You must take advantage of this.
If you haven't done so already, refinance your house. And if you don't currently own a house, go buy one... Seriously.
I believe in this idea so strongly, I'm putting my money where my mouth is... Last week, I explained why my money is on U.S. real estate. Florida real estate (outside of my own home) makes up the largest percentage of my financial assets. Florida offers exactly what you want: High yields and low borrowing costs.
It's a nationwide story as well... 30-year mortgage rates in the U.S. are in the 3.8% range. And 15-year mortgages are in the 3.1% range. These rates are not far from all-time records.
Don't get taken by ultra-low interest rates. Instead, consider taking advantage of them, starting right at home...
Good investing,

Further Reading:

On Friday, TradeStops founder Richard Smith explained why now is the time to "double down" on your commitment to being a disciplined investor. "Making sure that you don't get hurt too badly when you're wrong is the great secret to ultimately succeeding as an investor," he says. Learn more here.
Mike Barrett recently showed readers how to know exactly when to sell a big winner. To learn how to act rationally and logically... and to not let your emotions get the best of you, click here.

Market Notes

AT&T (T)... blue-chip telecom giant
Verizon (VZ)... blue-chip telecom giant
Alphabet Inc. (GOOG)... blue-chip tech giant
Philip Morris International (PM)... blue-chip cigarette giant
Constellation Brands (STZ)... blue-chip booze giant
McDonald's (MCD)... blue-chip fast-food giant
J.M. Smucker Company (SJM)... jelly
Tyson Foods (TSN)... meat
Kellogg (K)... Big Food
Mattel (MAT)... toys
WD-40 Company (WDFC)... household chemicals

Wells Fargo (WFC)... financial services
BB&T (BBT)... financial services
Deutsche Bank (DB)... financial services
Banco Santander (SAN)... financial services
Morgan Stanley (MS)... financial services
Charles Schwab (SCHW)... online broker
American Eagle Outfitters (AEO)... clothing retailer
Aéropostale (ARO)... clothing retailer
Kohl's (KSS)... department store
Tesla (TSLA)... electric-car maker
Santander Consumer USA (SC)... subprime auto-finance lender
Yelp (YELP)... online reviews

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