Should Investors Worry About the Fed's Next Move?

Trying to predict what consumers can expect from the Federal Reserve over the next five years is akin to peering into a cloudy crystal ball. No one really knows what the Fed might do—including the Fed—because world events constantly conspire to change the circumstances any decisions would be based on.

Here's what we do know, even without a high-functioning crystal ball: Everyone needs a good investment plan in place, no matter what the Fed's next move is.

Judging from everything going on with the economy and the stock market's volatility, I think it's safe to say the Fed has some real hesitancy about raising interest rates overall. We saw that when it failed to raise rates in June.

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And what's happening with U.S. markets is just one piece of the puzzle. Turmoil around the globe also plays into what the Fed decides. The Syrian refugee crisis, Greece's languishing economy and Brexit—the United Kingdom's surprise vote to exit the European Union—all play a role.

Brexit alone may have led to the Dow Jones industrial average plummeting 500 points one day in June. While it has mostly bounced back, the tech-heavy NASDAQ was down 3.3% in the first half of 2016.

The bottom line is that the world is interactive. Everything happening everywhere these days affects the U.S. market, which in turn affects Fed decisions.

Sadly, with interest rates at an all-time low for such a long time, it's difficult for anyone trying to save money to generate any kind of return without taking on more risk. Certainly, your money is nice and safe in a savings account or a CD, but the interest rates they pay are so small as to be practically nonexistent.

My advice? Keep an open mind about different tools that can help you generate income and cash flow. That might include high quality dividend-paying stocks, a solid fixed-rate annuity with an insurance company or, for a small percentage of your portfolio, income-producing real estate that's well diversified.

Even if the Fed does begin to raise rates, it's likely to be a process that limps along gingerly because of the world economic situation, with increases happening at just a quarter of a percentage point at a time.

But I'm convinced interest rates will indeed go up over the next five years, and I make that prediction not just because of some nifty crystal-ball gazing.

It's simply that up is just about the only direction available.

Bryan S. Slovon is founder and CEO of Stuart Financial Group, a boutique financial services firm exclusively serving retirees and soon-to-be retirees in the D.C. metro area. He is an Investment Adviser Representative and insurance professional.

Yvette Hammett contributed to this article.