One of the first things that finance students learn is that bond prices (and therefore bond returns) are inversely related to interest rates. Considering that all else is equal, when interest rates are going down, bond prices will go up, and when interest rates are going up, bond prices will go down.
This is fundamental to how finance works, and this raises the obvious question of why you would want to hold bonds when rates are rising – why would we choose to lose money?
— Read on retirementresearcher.com/should-you-own-bonds-in-a-rising-rate-environment/
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The Hype: CNBC Recession Countdown
According to one CNBC strategist speaking on the CNBC show Fast Money, he implied that the “recession countdown” clock has started, but the market will rally before the downturn begins.
This coverage of the “recession countdown” clock is the epitome of financial entertainment media hype. It brings to minds a quote from Warren Buffett…
“WE HAVE LONG FELT THAT THE ONLY VALUE OF STOCK FORECASTERS IS TO MAKE FORTUNE-TELLERS LOOK GOOD. ”
Warren Buffett is skeptical of the predictions of economic and financial forecasters, and we should be, too.
Fund Manager, Kevin Landis, has walloped the stock market over the past decade – MarketWatch
Six investing lessons you can learn from tech investor Kevin Landis.
— Read on www.marketwatch.com/story/forget-warren-buffett-this-fund-manager-has-walloped-the-stock-market-over-the-past-decade-2019-05-23
Recession Risk
Many economists and financial analysts insist that a recession is unlikely in the next twelve to eighteen months. They cite data that indicates that the consumers are healthy. The economic data shows that American consumers all have jobs, they are working in record numbers and their wages are growing. And, they’re spending.
Additionally, consumers are tuning out the financial entertainment media unending talk about recession, tariff tensions and inverted yield curve. Since, one of the biggest risk to the economy is the possibility that Americans become overly concern about their financial well-being and self talk the economy into a recession.
Furthermore, history reveals that an inverted yield curve has preceded every recession; it, however, has not predicted every recession.
The Art of Disciplined Investing – Retirement Researcher
Disciplined investing is rewarded by the financial markets because capitalism, by and large, works. For investors to put their capital at risk, there needs to be a commensurate expected return. This is finance. Everything else is just details.
Investors are rewarded for taking risks. That means that sometimes that return doesn’t appear. In fact, if you look at the equity premium, or the returns stocks minus the returns of short term US Treasury bills, it’s actually pretty rare for the premium to be close to the average.
— Read on retirementresearcher.com/the-art-of-disciplined-investing/
Understanding Bonds: Riding the Yield Curve
Rates on bonds of different maturities behave independently of each other with short-term rates and long-term rates often moving in opposite directions. By comparing long- and short-term bond yields, the yield curve describes future trends in bond returns.
— Read on www.kiplinger.com/article/investing/T052-C000-S001-riding-the-yield-curve.html
Bond Market: Why Is Everything Upside Down? | Charles Schwab
Bond yields in major developed countries declined sharply in mid-August, bringing the total amount of negative-yielding bonds around the globe to more than $16 trillion. The entire German yield curve is below zero. In the U.S., the 30-year Treasury yield fell below 2% for the first time in history, causing the yield spread between two-year/10-year Treasuries to invert briefly, for the first time since 2007. The three-month/10-year spread has been inverted on and off since March.
— Read on www.schwab.com/resource-center/insights/content/bond-market-why-is-everything-upside-down
If you want to understand how the world works, you need to understand bonds – MarketWatch
The stock market is quite a bit smaller, and frankly, it isn’t that important. People focus on it because stocks are easy to understand. But if you want to understand how the world works, you need to understand bonds.
— Read on www.marketwatch.com/story/if-you-want-to-understand-how-the-world-works-you-need-to-understand-bonds-2019-08-22
How to Become A Millionaire – 5 Steps to Becoming Wealthy
Want to know how to become a millionaire? Follow this 5 step process: Earn money, spend less than you earn, save, invest, and repeat. Then just add time.
— Read on cashmoneylife.com/how-to-become-a-millionaire-2/
Equity Volatility Does Not Spell Recession – TheStreet
A Recession Is Not Imminent.
Equities and bonds are worried about a recession.
With the escalating trade war with China, the odds of a U.S. recession have risen a little, to say a one-in-three chance. Still, we are hard pressed to see an actual U.S. recession.
— Read on www.thestreet.com/markets/equity-volatility-does-not-spell-recession-15065765
