Wow, what a difference a year makes. Last year at this time, there was a fear that the economy was overheating and in need of continued interest rate hikes from the Federal Reserve. The 10-year U.S. Treasury note had just hit 3.25% and the service sector strength as measured by the ISM (Institute for Supply Management) measured its highest read in history.
The “Race to Zero” is over. Commissions at TD Ameritrade have always been very low relative to its competitors in the industry. I’m happy to report they have now been reduced to $0.00 on all TD Ameritrade stock and ETF trades effective immediately! This is beneficial to everyone, but it is particularly beneficial to those adding regular contributions incrementally to fund Roth IRAs, Traditional IRA’s, SIMPLE IRA’s and SEP IRA’s. The race to zero is over, and investors win!
It’s no secret that the sustained generational low levels in interest rates have helped the stock market climb to near record highs over the past decade. Many would assert that the record rise in stock prices is artificially propped up under monetary policy decisions that have forced savers to take on more risk in order to find more acceptable returns. Nevertheless, for those of you who have not let volatility of stocks shake you into making bad decisions, you have been rewarded for sticking with stocks despite the general public’s irreverence towards them. Low interest rates have certainly played a part in your success, but not all of it.
