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40 | I NSIGH T • M a y 2 0 15 w w w . i n s i g h t o n b u s i n e s s . c o m H ow oen do people think about the national debt or interest rates? Other than seeing the occasional snippets in the evening news, most people probably don't spend any time at all thinking about rates or debt. So why should they care? Well, for a couple of reasons, especially since low rates and high debt are increasingly affecting everyone. Savers are currently earning next to nothing in their bank accounts because of the current low-rate environment. Although this isn't anything new, most investors do not understand the loss of potential growth on their investments. For example, if an investment of $10,000 grew annually at 1 percent over 30 years, it would grow to $13,487. If the Federal Reserve increased rates so savers could earn 6 percent, the same investment grows to $57,434. at's a huge increase! So, why isn't the Federal Reserve increasing rates to help savers? ere are multiple answers to this question, but a significant answer could point to the $18 trillion of national debt. Let's say the Fed raises rates to 6 percent, meaning all future money the government wants to borrow must be paid back at the higher 6 percent interest rate. It would then cost the government billions of dollars more per year to borrow, which they then add to the $18 trillion national debt balance. at's billions of dollars more that each American citizen must eventually pay back. So the very same increase in interest rates that savers so badly need could simultaneously send the national debt spiraling upwards out of control. Ultimately, this relationship between rates and debt create an unsettling conflict of interest for the government. clearTREND research produced by our firm in Appleton indicates upward trends in most U.S. stocks as well as most U.S. sectors. U.S. energy has been trending downward. Our U.S. Economic Health Index shows that 61 percent of U.S. sectors are expanding while 17 percent are contracting. "Despite the expectation of rate increases later in 2015, U.S equities are still trending upward," says Alexander Hunt, advisor to private clients and retirement plans. "If and when the Fed raises rates this year, it will be interesting to see how markets react." KEY: = uptrend = downtrend Ticker = trading symbol (individual securities only) Trend Began = date on which current trend was identified Confidence = clearTREND's historic success rate in generating capital gains based on accurate trend identification clearTREND U.S. Economic Health Index: trending i n fo c u s Savers miss out as Fed keeps rates low Interest rates and debt are two sides of the same coin This index measures more than 130 unique U.S. market sectors to determine how many are expanding, stable or contracting. More than 50 percent of expanding sectors are healthy, while less than 50 percent are not. 61% Expanding: 61% Neutral: 22% Contracting: 17% Poor Fair Good Excellent 0 Data as of 4/11/2015 Sector Focus: Banking Description Ticker Trend Began Confidence Bank of America Corporation BAC 2/10/15 74.67% Capital One Financial Corporation COF 3/18/15 80.70% Citigroup Inc. C 3/26/15 78.89% JPMorgan Chase & Co. JPM 2/13/15 74.46% PNC Financial Services GroupThe PNC 11/12/14 83.68% State Street Corporation STT 4/6/15 78.40% US Bancorp USB 10/14/11 72.92% Wells Fargo & Co. WFC 2/5/15 85.31% Transportation / Logistics Description Ticker Trend Began Confidence D. R. Horton Inc. DHI 10/24/14 74.46% NVR Inc. NVR 7/11/14 87.04% PulteGroup Inc. PHM 10/29/14 74.80% Standard Pacific Corp. SPF 2/18/15 78.49% Taylor Morrison Home Corporation TMHC 2/23/15 92.86% Toll Brothers Inc. TOL 1/12/15 74.76% Tri Pointe Homes Inc. TPH 11/26/14 99.00% United Parcel Service Inc. UPS 3/9/15 71.01%