Tag Archives: yield curve

When Greed Shifts To Fear

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My inbox is filling with doom-forwards.

Contacts are asking for quick calls to discuss strategy.

UK Pensions nearly blew themselves up.

Remember : worry has never changed outcome

Prepare : know what you want to buy

Watch.

Patiently.

Monday
May

The yield curve, and net yields in the real estate market, are indicating we have a ways to go with price adjustments.

At present, stocks down ~20% and my zip code’s real estate 10% off the peak.

30-Year mortgage rates at 7.5% was unthinkable a few months ago
Seems pretty close, now (6.7%)

If you’re a cash buyer then the psychological pain of waiting is being reduced.

Any USD Money Market Fund is yielding better returns than you can remember (VMFXX 2.8% on Monday).

I know inflation is a multiple of that but financial psychology isn’t rational – nominal yields matter to the marginal buyer.

My advice:

  • Let it unfold
  • Enjoy life
  • Share experiences with friends and family

Be prepared to “give back” paper gains as the interest rate adjustment works through the global economy.