German economy shrinks : https://edition.cnn.com/2019/08/14/business/germany-economy-...
UK economy shrinks : https://metro.co.uk/2019/08/09/pound-plummets-uk-economy-shr...
Yield Curves Invert in U.S., U.K
11–20 of 671 posts
Re: Yield Curves Invert in U.S., U.K
#12Time to get more conservative with your investments. Just moved my retirement accounts from 100% in a 2050 lifecycle fund to 75% in a 2030 lifecycle fund and 25% in just government bonds. Not all investment vehicles have a "lifecycle" fund but its intent is to be appropriately conservative for a target date. As the date grows closer, the fund gets more conservative in order to lessen the risk of sudden swings right b…
I'm 40% in cash, 50% in S&P and 10% in small-cap. The last few months, all of my contributions have been going into cash, so that when the fall happens, I can hopefully scoop up a deal.
Re: Yield Curves Invert in U.S., U.K
#13Time to get more conservative with your investments. Just moved my retirement accounts from 100% in a 2050 lifecycle fund to 75% in a 2030 lifecycle fund and 25% in just government bonds. Not all investment vehicles have a "lifecycle" fund but its intent is to be appropriately conservative for a target date. As the date grows closer, the fund gets more conservative in order to lessen the risk of sudden swings right b…
Why does low or negative yield bonds mean that you are going to be ok with govt bonds? This is exactly the problem, where bonds are no longer providing interest payments.
I agree that being more conservative is probably necessary, however I think other than specific investments and... burying your cash might be the "conservative" options. Bonds were those, and no longer are now.
Re: Yield Curves Invert in U.S., U.K
#14It's a self fulfilling prophesy to an extent because all it takes to cause a recession is to convince everyone there's a recession.
Re: Yield Curves Invert in U.S., U.K
#15Re: Yield Curves Invert in U.S., U.K
#16Time to get more conservative with your investments. Just moved my retirement accounts from 100% in a 2050 lifecycle fund to 75% in a 2030 lifecycle fund and 25% in just government bonds. Not all investment vehicles have a "lifecycle" fund but its intent is to be appropriately conservative for a target date. As the date grows closer, the fund gets more conservative in order to lessen the risk of sudden swings right b…
Or cash out what you can and wait for the dip to reinvest...
Personally I'm sitting tight, but that's because I'm a long term investor not a day trader.
Re: Yield Curves Invert in U.S., U.K
#17It's a self fulfilling prophesy to an extent because all it takes to cause a recession is to convince everyone there's a recession.
That's partly because the market boom is itself a self-fulfilling prophecy. Stock markets go up because other people think they're going up. People who buy securities for the purpose of re-selling, rather than holding, bid prices up, based not on fundamental valuation but on the thought that it will become more popular.
Stock markets aren't the same as the economy as a whole, but stock market bubbles boost the economy when irrational exuberance increases the total apparent wealth. And when enough people decide that it's peaking, it does, and the same process works in reverse, causing a recession.
So yeah, it's a self-fulfilling prophecy, but that doesn't mean there's a way to avoid it. The market prices are already high; they must eventually revert to something closer to a true valuation. But since that time is determined almost entirely by consensus, nobody knows when. Indicators like this one are a sign that people are changing their minds, but it's been that way for a while. They're just indicators of public perception, and the public takes them into account, too.
Re: Yield Curves Invert in U.S., U.K
#18It's a self fulfilling prophesy to an extent because all it takes to cause a recession is to convince everyone there's a recession.
Especially since speculants start betting on it further driving it happening.
Re: Yield Curves Invert in U.S., U.K
#19Earlier quoted context omitted.
Hasn't it been right 7/8 of the last recessions?
Has it ever inverted but then a near term recession never followed?
Re: Yield Curves Invert in U.S., U.K
#20One of the surest signs to a recession one can find.
"As recession signals go, this so-called inversion in the yield curve has a solid track record as a predictor of recessions. But it can take as long as two years for a recession to follow a yield curve inversion."
https://www.reuters.com/article/us-usa-economy-watchlist-gra...