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Msg  56966 of 57073  at  5/13/2023 10:54:37 AM  by

MarkfromReston


 In response to msg 56965 by  rlp2451
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Re: How Long?

I guess that's why people ladder their bonds or CDs so that they can always have money maturing to adjust to what the market is doing at that point.
The challenge is trying to predict where we are in the cycle: are we in the early stages of the pre-Volker era in the early 1970's when everyone thought inflation was defeated and then Volker was forced to raise rates even higher when inflation returned; or are we back in the Bernanke period where QE3 was stopped only to come back to QE forever which drove long rates down.

The inverted bond curve seems to be saying that disinflation, recession and lower long term rates are coming.

I bought gold in case the Fed chooses the QE route again. If rates do come down because inflation is finally defeated, then stocks should go back up including all the good dividend paying ones.

To me, bonds and CDs are not to make capital gains but are just to earn a respectable return while waiting for other options to present. I'm sitting in a money market (with a good %) because that yield keeps going up. When the Fed pauses, then I'll have to start thinking about shifting. It may be another 2 meetings before they pause, so it may be until July. The long end might start to anticipate that and start moving down (it may have already started)



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