Inverted Yield Curve

[hununuh]

Is anybody rebalancing their portfolio given this new inverted yield curve? Perhaps, more exposure to precious metal or crypto?

It's only been day 2, but 10 consecutive days of inverted curve is usually followed by a recession, on average of about 1 year later. Some say it's different this time because of unprecedented central bank manipulation. Who knows.

What do yall think?

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[AdmiralChz]

Perhaps, more exposure to precious metal or crypto?

Aaaand were done here.

 

[okayplayer]

Is anybody rebalancing their portfolio given this new inverted yield curve? Perhaps, more exposure to precious metal or crypto?

It's only been day 2, but 10 consecutive days of inverted curve is usually followed by a recession, on average of about 1 year later. Some say it's different this time because of unprecedented central bank manipulation. Who knows.

What do yall think?

No.

I’ll keep dumping 10k+ into the market every 25th.

 

[DM27]

I will say that of all the garbage voodoo indicators, the yield curve is the only one that definitely makes me somewhat pay attention.

If I was older and nearing retirement age and already had a planned rebalancing ahead I might do it sooner, but since I am younger I am just staying the course.

For reference, if you feel the sentiment the yield curve reflects usually ends up holding, you still have a year or more lag time before the effects tend to really manifest on returns.

 

[deleted126335]

New money for bonds goes to very low duration instruments. Just decided to pull the trigger on $20k of I Bonds. 0.5% real.

 

[urge]

An inverted yield curve is a mystery to me. How does that even happen? Let’s say you are buying treasuries. Why would anyone buy the longer term one when the shorter term one pays more! And if nobody buys the longer term one then the yield has to go up.

But people go for the longer lower yielding one. Who would do that? Makes no sense.

Can anyone explain why anyone would buy the longer lower yielding term over the shorter higher yielding?

 

[eagle0990]

The whole point is that people no longer have confidence in the long term stability of the economy. They run to stable safe yields. The 10 yr treasury does that. So as people flock to it prices rise, yield’s drop. Less people are interested in the short term bonds because they don’t trust the economy over the shorter term. Thus demand falls, prices drop and yields go up.

It’s all about confidence, or lack of it, in the economy.

 

[urge]

The whole point is that people no longer have confidence in the long term stability of the economy. They run to stable safe yields. The 10 yr treasury does that. So as people flock to it prices rise, yield’s drop. Less people are interested in the short term bonds because they don’t trust the economy over the shorter term. Thus demand falls, prices drop and yields go up.

It’s all about confidence, or lack of it, in the economy.

Nobody can properly predict the economy 6 mo ahead of time (as far as I’m concerned). Why would anyone buy 10 year paper based on current events? I think it’s nuts.

 

[urge]

Nobody can properly predict the economy 6 mo ahead of time (as far as I’m concerned). Why would anyone buy 10 year paper based on current events? I think it’s nuts.

Maybe an inverted yield curve only means there are a lot of insane people investing and the sane people should step into the sidelines.

 

[okayplayer]

While you guys try to to time the market, I’ll keep following my Investor Policy Statement, keep dollar cost averaging up or down, and rebalance once a year.

You might beat me in the short term, but in 20 years, I will come out ahead.

 

[pgg]

No changes.

I'm pretty sure that in 2060 or whenever I want to withdraw and spend any of this money, what some chart or chicken entrails some idiot on TV said predicted the future won't even make a list of the top 1000 actionable events.

Crypto is stupid.

 

[Mman]

I think the inverted yield curve is likely indicative of recession in the not too long of time frame, but it also doesn't impact my long term investment strategy.

 

[Man o War]

We are due for a recession, it’s been 10 years.
Buy as much as you can cheap.

 

[deleted126335]

We are due for a recession, it’s been 10 years.
Buy as much as you can cheap.

care to share what you think is cheap?

BTW, Things get cheaper during recessions. Of course people often don't have the cash. Those with the cash are often unwilling to part with it

 

[vector2]

care to share what you think is cheap?

BTW, Things get cheaper during recessions. Of course people often don't have the cash. Those with the cash are often unwilling to part with it

s&p 500 trailing p/e closer to 15 and a dividend yield closer to 2.5%

me personally, i'm going to just keep maxing out my tax deferred accounts with an automatic monthly contribution into some combination of index funds and then build a dividend growth portfolio with any excess cash in my brokerage account. there's always some relatively cheap dividend growth stocks out there even when the market seems lofty

 

[Man o War]

care to share what you think is cheap?

BTW, Things get cheaper during recessions. Of course people often don't have the cash. Those with the cash are often unwilling to part with it

Depends on what it is!
We (doctors) are fairly recession proof so recessions are good opportunities for us to buy a lot of stuff on sale.

 

[Spikebd]

Depends on what it is!
We (doctors) are fairly recession proof so recessions are good opportunities for us to buy a lot of stuff on sale.

It’d be nice if we get a recession in a few years just as I’m starting to make attending money. If we get the dip sooner then I’ll have to moonlight so I can get some more cash to deploy.

 

[deleted126335]

During recessions salaries go down. We are not immune. Retirees and near retirees keep working harder. Most people want to work more because their homes, stock portfolios, and stuff are worth less than they used to be. Also family members need help. People tend to hang on to their cash and are less likely to invest in risk assets. Try reading some financial history.

 

[Mman]

During recessions salaries go down. We are not immune. Retirees and near retirees keep working harder. Most people want to work more because their homes, stock portfolios, and stuff are worth less than they used to be. Also family members need help. People tend to hang on to their cash and are less likely to invest in risk assets. Try reading some financial history.

Salaries of physicians don't really budge much during a recession.

 

[deleted126335]

Salaries of physicians don't really budge much during a recession.

You sure about that? During a recession, less people are employed...Less good insurance mix...Harder to collect copay and deductibles from those with insurance. Docs want to work harder to maintain their income or recoup a drop in the price of their stock portfolio....More competition for work...

 

[Mman]

You sure about that? During a recession, less people are employed...Less good insurance mix...Harder to collect copay and deductibles from those with insurance. Docs want to work harder to maintain their income or recoup a drop in the price of their stock portfolio....More competition for work...

Our group income per physician has not dropped with recessions over the past 40 years. I mean we have little ebbs up and down from year to year, but nothing significant with a recession. CMS still pays their bills. Insurance companies still pay their bills. I mean at most commercially insured patients are paying what, 20% of their bill? And what percent of patients are commercial? And while maybe you normally collect 85-95% of that 20% from the patient it might drop a little during a recession but that's like less than 5% of your pretax income.

I'd say the cosmetic type stuff that people pay cash for might fall off during a recession, but most of the people that can afford that still have their good income.