Oh so delish. Get woke, Jamie.
Wednesday, January 10, 2018
Tuesday, January 9, 2018
Bill Gross Says Bond Bear Market Confirmed
I am not as sure about a bond bear market as Bill Gross. Today, the 10-year treasury closed above 2.5%, but I would not call a bear market until it breaks 4.0%. With a fair amount of my IRA in a bond ladder, higher interest rates just mean the next rung on my ladder will earn a higher rate. I own individual bonds, so even though the market price will move inversely with interest rates, I plan to hold all of them to maturity. It doesn't make any difference what the market price of the bonds is as long there are no defaults. I don't own crazy synthetic mortgage tranches, just A and AA corporates and AAA treasuries.
If we do have a bear market in bonds, the higher rates should attract more money and that might drain money from other investments. It could mean a bear market in stocks and/or other asset classes. High rates killed the stock market in the late 70s and early 80s. The Fed is rumored to have 2-3 more rate hikes in store for 2018. I'll be looking to see if we have any curve inversion as rates move up. It will be interesting to watch.
If we do have a bear market in bonds, the higher rates should attract more money and that might drain money from other investments. It could mean a bear market in stocks and/or other asset classes. High rates killed the stock market in the late 70s and early 80s. The Fed is rumored to have 2-3 more rate hikes in store for 2018. I'll be looking to see if we have any curve inversion as rates move up. It will be interesting to watch.
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