*A* yield curve has inverted

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
Post Reply
User avatar
BuyAndHoldOn
Posts: 158
Joined: Mon Mar 30, 2015 6:51 pm

*A* yield curve has inverted

Post by BuyAndHoldOn » Mon Apr 09, 2018 11:39 am

https://www.bloomberg.com/news/articles ... -inversion


Should I sell all of my stocks today; or wait for the end of the week?

I am actually not familiar with this section of the yield curve (OIS is new to me also). How much "value" does this inversion offer as an economic indicator; can we see a Chart on FRED or somewhere else?

Sorry - I'm at work, wanted to post the question and I haven't done much research yet.

jebmke
Posts: 7628
Joined: Thu Apr 05, 2007 2:44 pm

Re: *A* yield curve has inverted

Post by jebmke » Mon Apr 09, 2018 11:41 am

Nominal curve is flattish at the long end.

From 10-30 years you get just a little over 1bp per year. Even 5-10 you are getting less than 5bp. No real reason to extend beyond 2-3 years with anything right now.
When you discover that you are riding a dead horse, the best strategy is to dismount.

User avatar
BuyAndHoldOn
Posts: 158
Joined: Mon Mar 30, 2015 6:51 pm

Re: *A* yield curve has inverted

Post by BuyAndHoldOn » Sun Apr 15, 2018 12:43 pm

I looked into this briefly when I had some time. I did not find anything beyond the Bloomberg article [above, original post] that was explanatory or informative.

If anyone knows anything else about the Fed Funds OIS yield curve and/or its inversion: Please post. Thanks!

User avatar
Noobvestor
Posts: 4666
Joined: Mon Aug 23, 2010 1:09 am
Contact:

Re: *A* yield curve has inverted

Post by Noobvestor » Sun Apr 15, 2018 7:08 pm

jebmke wrote:
Mon Apr 09, 2018 11:41 am
Nominal curve is flattish at the long end.

From 10-30 years you get just a little over 1bp per year. Even 5-10 you are getting less than 5bp. No real reason to extend beyond 2-3 years with anything right now.
I'm open to being called irrational for this, but I'm holding intermediate-term Treasuries versus short-term not for the few extra bp but for the potential flight-to-safety effects if stocks start to tumble. In other words: I'm looking at potential correlation in a total-portfolio sense.

As for selling everything ... I would stay the course, but I do enjoy playing with this interactive graph: http://stockcharts.com/freecharts/yieldcurve.php
"In the absence of clarity, diversification is the only logical strategy" -= Larry Swedroe

Post Reply