Then there s the matter of your heating bills. Ours tripled last month, prompting new resolve not to spend money again, ever. If repeated across the country, this attitude might have serious consequences for the economy. Well, first of all, interest rates are going down. Companies can refinance their debt at lower interest rates.
Stocks look more attractive compared with bonds and money market securities.
Investors are willing to pay more for future earnings when interest rates are low. Tax cuts can be stimulative because people tend to go out and spend their refunds. That, too, should be good for stocks. But a sensible approach would be to add gradually to your stock funds, particularly in beaten-up areas like technology. You may not see much reward this year.