I’m a long term investor who only buys individual muni bonds. I have a goal of getting a minimum of 4.5%. I’ve been sitting in cash waiting for rates to rise and wonder what your thoughts are on rates rising in the future? - Dan G. St.Louis

Thursday, Dec 10, 2015

A: Dan, In the 50+ years we’ve been here, we have yet to see anyone accurately predict the direction of interest rates for any meaningful time period. The “so called” experts and economists have been forecasting higher rates for many years.

Successful Tax-free investors invest when they have investable dollars on hand, rather than trying to time the market.

The longer your funds are tied up in money markets (presently earning almost zero), the more return you will forgo waiting for interest rates to rise.We call it the cost of waiting. If rates eventually do rise, You’ll need a yield in excess of 4.5% to reach your goal. If rates don’t rise, you’ll invest at rates below your target rate.

Roland Stoever

Stoever Glass Wealth Management Client (Schwab Alliance)

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