Money Goes Where It's Treated Best - Cabot Wealth Network

Money Goes Where It’s Treated Best

Money Goes Where It's Treated Best

Walter WritsonMy father often used this phrase when writing about the effect of interest rates on the stock market. When interest rates rise (he would write), money is gradually drawn out of the stock market, as the rewards of bonds and other interest-paying instruments increase. And when interest rates fall, money leaves those instruments and flows back into the stock market. This, of course, is a very simplistic explanation; interest rates have numerous interrelated effects. Nevertheless, it’s true. But I would amend the saying, to “Money Goes Where People Think It’s Treated Best.” And it works for individual stocks, too. Growth investors can do well by following the institutional money, because professionals are putting it where they think it will be treated best.

Walter Wriston, CEO of Citibank from 1967 to 1984, said “Capital will flow where it is wanted and stay where it is well treated.”

Comments

You must log in to post a comment.

Enter Your Log In Credentials

This setting should only be used on your home or work computer.

Need Assistance?

call Cabot Wealth Network Customer Service at

(800) 326-8826

Send this to a friend