She tell me "buys bonds, they good" so i bought some. Well its actually Charles Scwabb, that is telling us, with the pending topping out and potential drop of Treasury Yields, bonds will finally fare well. In fact, as we see in the mortgage rate drops, yields have dropped 3/4 of a percent. Mortgage rates have dropped even more, today the posted rate at a mortgage broker, was 5.2 for fixed, and 6.5 for Variable. This is an inverted yeild curve and it wont last long. There is also talk that a variable rate will drop faster than fixed, as the fixed rate is overextended. Banks trying to lure people in, knowing they can can fund these rates with borrowed money later, playing the spread. Banks are smart, they have all the money.
"In our view, much of the inflation driven by supply shortages early in this cycle has been corrected"
Oh, so it wasn't caused by interest rates too low and too much money in the system? It was covid all along. This is a view I have maintained for a while, meaning the hike of interest rates was probably over done, it was a squeeze that drove prices up, and now that its not there, prices should abate... so did we really need these drastic hikes? Probably not... if the FED and BOC had any patience, which they don't, they probably could have hiked a few percentage points and then waited. Oh, but this is an election year, we have to fix this and then take credit for it... That may blow up if we go into a deep recession... and speaking of recession talk
"This scenario assumes the Fed cuts rates by up to 150 basis points in the next 12 months due to the onset of recession"
6 months ago an editor would not even print the work Recession for fear of being laughed out of the news room, now its on everybodys mind, now its kicked around like a leaky soccer ball that nobody really wants to take home.
So ya, I sold some QQQ, its at a record high, why not, and bought Bonds... they can only go up from here. And I did a balance work sheet of all my investments.
With most of my funds, I am 60/40 or close to it, and some I am totatlly in a t-bill, GIC, or fixed income. But I also have some "Short Term" goals to consider, so this includes my cash cushion.
1. I need a better truck ($25,000 approx)
2. I retire in 1 year, so I need a cash cushion that will provide $1000 a month for about 2 years, so have staggered 4 GIC's at one and two years, all with a return of close to 5%.
Your situation will be completly different, but the markets I trust right now, are the TSX, S&P, and DOW, the Nasdaq is too volatile, and I have made a shit ton of money on it, so time to get out, at least a bit. Its ok to harvest gains, only the dumb and dumber have FOMO. And right now... I don't trust anybody, so I sleep better at night knowing I did something, even as small a change as it is.