- normally long-term (LT) bonds rates are higher than short-term (ST) rates
- an 'inverted' yield curve has long term rates below short term rates
- long term rates fall as investors attempt to lock-in higher rates
- when (LT) rates fall below (ST) rates - a 'potential' recession is indicated
What do we do .. (web search and discussion w/Advisors)
- remember that no one can predict the market!
- remember the market has been and will always be volatile
- remember the market has always recovered after a correction
- an inverted yield curve is not an absolute recession predictor
- best plan - have a diversified portfolio based on your risk profile
- do not sell or become emotional - ride it out
Read After the Yield Curve Inverts
Other Resources:
https://awealthofcommonsense.com/2015/11/playing-the-probabilities/
https://www.businessinsider.com/cost-of-missing-10-best-days-in-sp-500-2015-3
https://www.marketwatch.com/story/after-the-yield-curve-inverts-heres-how-the-stock-market-tends-to-perform-since-1978-2019-08-14
Other Resources:
https://awealthofcommonsense.com/2015/11/playing-the-probabilities/
https://www.businessinsider.com/cost-of-missing-10-best-days-in-sp-500-2015-3
https://www.marketwatch.com/story/after-the-yield-curve-inverts-heres-how-the-stock-market-tends-to-perform-since-1978-2019-08-14
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