Comments on: Where Are Interest Rates Going?

By: Interest Rates: 2010 Mid-Year Review | Balance Junkie

Interest Rates: 2010 Mid-Year Review | Balance Junkie — Sat, 17 Jul 2010 13:31:25 +0000

[...] in a really bad neighbourhood. (We discussed the prospect of bond market indigestion in our last interest rate commentary.) No one ever claimed markets had to make sense – unless you believe in Modern Portfolio [...]

By: Low Interest Rates: The Good, the Bad and the Ugly

Low Interest Rates: The Good, the Bad and the Ugly — Thu, 22 Apr 2010 15:50:29 +0000

[...] more information on how interest rates work, you might want to check out the following articles: Where Are Interest Rates Going? and Why Are Mortgage Rates Rising? Let’s look at the good, the bad and the potentially ugly [...]

By: Why Are Mortgage Rates Rising? | Balance Junkie

Why Are Mortgage Rates Rising? | Balance Junkie — Fri, 02 Apr 2010 09:47:20 +0000

[...] In general, central banks have greater control over short term rates, whereas bond traders have more control over longer term rates. You can read more about the mechanics of the bond market in Where Are Interest Rates Going? [...]

By: 2 Cents

2 Cents — Mon, 15 Mar 2010 15:01:28 +0000

I like your thoughts on pipelines and technology. I love the idea of setting a risk limit and carrying zero debt. If 50% is right for you, that’s great. My point is simply that I’d like to see people thinking about which level is right for them.

I also like the idea of looking for some stable yield. The only risk there is that, if rates do rise significantly, dividend paying stocks sometimes don’t do as well since investors can get risk-free yield from other instruments.

Thanks for your comment!

By: Brian

Brian — Mon, 15 Mar 2010 04:02:43 +0000

Trying to figure out what is going to happen next is not a concern at all. Rationalizing the areas to invest in for the long haul is.

Look at oil and gas in Canada. The funds that invest in them are up 73% in the past year. Oil and gas is not going away. We are always going to pay for it. Pipelines are not going away, they are always going to pay a fat dividend yeild.

The technoology build out this year is going to be huge as more companies embrace the build out cycle to the new awesome Microsoft product and the low cost of computer enhancement thanks to new entrants like Lenovo. As productivity oer active worker has skyrocketed so too has investment to sustain this advancing productivity. Hence, Tech wins.

As more and more are fleeing their homes and leaving them vacant they are renting apartments. Hence, Apartment reits win in this economy. They start filling up and they can raise the rent. As interest rates start ticking up later this year the entry cost to rebuy into a home will move higher and higher and out of reach of anyone with 21% credit card debt so they will have to stay renting.

As the cost of oil stays high the companies that build the equipment to get oil out of the ground sell more equipment and they buy more steel. Hence, mid cap oil and gas suppliers win as does the steel industry as a whole. If steel is winning then the COAL industry that supplies the coal to make the steel wins.

If population expansion continues at its break neck pace then agricultural firms and the potash industry wins huge. Hence MOO and companies like POT simply pile up profits.

We can run scared from the potential for doom and gloom, I concur. But, we can use some logic to determine some areas we can be confident investing in and limit our exposure to say 50% cash and no debt with the other 50% invested in the areas mentioned above with a guide towards YEILD to limit the risk further.

By: Economics: Your Personal Finance Weather Forecast | Balance Junkie

Economics: Your Personal Finance Weather Forecast | Balance Junkie — Thu, 18 Feb 2010 10:52:30 +0000

[...] daily. There are even some who dismiss economics as irrelevant to personal finance. What do the bond markets and interest rates have to do with your everyday money management? In my humble opinion, a [...]

By: Money Hackers Carnival #103 – Snowed In Edition

Money Hackers Carnival #103 – Snowed In Edition — Wed, 10 Feb 2010 10:08:54 +0000

[...] Cents presents Where Are Interest Rates Going? posted at Balance [...]

By: 2 Cents

2 Cents — Sun, 07 Feb 2010 22:20:57 +0000

That’s about as certain as I feel trying to figure out what’s going to happen next in this environment!

By: Doctor Stock

Doctor Stock — Sun, 07 Feb 2010 06:21:34 +0000

I suspect if you wait long enough, they’re going up… sounds safe, doesn’t it?
Doctor Stock´s last blog ..Lessons from the Casino – Lesson 8 of 8

By: 2 Cents

2 Cents — Fri, 05 Feb 2010 15:33:37 +0000

Yes, I guess a Japan-style deflation is what I’m concerned about. Note that during yesterday’s equity sell-off, investors fled to U.S. Treasuries, driving rates down a bit. I think that’s because the worry of the day was Europe. If the worry shifts to the U.S. I would think Treasuries might sell off, causing rates to rise. This could happen rather quickly given the sheer quantity of money parked in Treasuries at the moment. We’ve seen what can happen when everyone pulls the ripcord at once.

The U.S. has the ability to print money to counteract deflation and that could potentially lead to inflation down the road. I guess a little inflation would be good right about now. That goes along with your idea of wanting a small rise in rates, but not too much. Thanks for your input!