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Bonds And TLT Risk

  • May 22
  • 2 min read

Bonds have been dropping for a few years and started another decline in September of last year.


I posted recently that a Fed rate cut would actually potentially risk the stock market and the economy. That's opposite contemporary thinking.


If a Fed rate cut further spikes yields, the economy would likely get hit by higher rates because consumers couldn't handle the extra expense. The stock market would also likely get hit by repricing higher yields based on DCF formulas that are central to asset pricing.


Historically when the yield curve moves positive from negative, as it's recently done, it's hurt the economy and stock market. Based on the explanation above we can understand why.


We are watching many other factors in the stock market to help us decide. To know the key levels that we're watching in TLT, SPY and our real-time daily take sign up for a free trial.


All investments have many risks and can lose principal in the short and long-term. Options have even more risk and should be fully understood before entering. The information provided is for information purposes only and can be wrong. By reading this you agree, understand and accept that you take upon yourself all responsibility for all of your investment decisions and to do your own work and hold Elazar Advisors, LLC, and their related parties harmless. Opinions given are at this moment and can change after this is published. If our calls are made public (outside the service) we may or may not update our opinions publicly.


 
 
 

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