Interest rates are not everything

It is folly to invest solely because rates are low and shy away because rates are rising.

No two bull markets are alike, yet they all share a common thread—optimism. Reasons for optimism can be varied, but the end result is the same—rising prices. Sometimes, this is matched by sound economic fundamentals and improving earnings, and sometimes not. There are times when prices begin to diverge from fundamentals. It is times like these that investors begin to grasp for things that they can massage to suit their own biases. Nepal’s stock market is in a strong bull trend currently, which increasingly many attribute to a drop in interest rates. The fact is that low interest rates are symptoms of the times—that of sluggish economic activity and deposits growing faster than loans.