This is how bonds work. Like any product, bonds compete for your money. When bond prices are down and yields are up, investors should be excited, just as they are when anything else goes on sale.
But for some reason, when it comes to investing, investors often curl up in a corner and hide when things go on sale or drop in price. It’s human nature.
Today, some bonds are priced at multi-decade lows; in other words, their yields are at multi-decade highs. This is not great news if you’re a borrower or trying to buy a house, but if you’re one of my successful readers and have some money to invest, it’s a good thing. You’re the bank.
As I’ve told you, markets are competing for your money. Higher bond yields are putting pressure on stocks because you can get more bang for your buck with bonds today than a year or more ago.
The market will find its price. The market will determine interest rates. This is healthy. This is how markets work.
Action Line: Don’t fight the market—take what it’s telling you and invest accordingly. Let’s set up a time to talk. Email me at ejsmith@yoursurvivalguy.com.
