Why Bond Yields Are a Key Economic Barometer | WSJ 

Find stocks with market-beating yields and shares that at least keep pace with the market for a long term.For a successful long-term strategy | recommend you seek the guidance a broker or financial advisor.

I agree. Based on personal experience working with an investment advisor, I currently have $385k in a well-diversified portfolio that has experienced exponential growth. It's not only about having money to invest in stocks, but you also need to be knowledgeable, persistent, and have strong hands to back it up.

Glad to have stumbled on this conversation. Please can you leave the info of your investment advisor here? I'm in dire need for one.

Her name is “VIVIAN CAROL GIOIA” can't divulge much. Most likely, the internet should have her basic info, you can research if you like

I just Googled her name and her website came up right away. It looks interesting so far. I'm going to send a mail to her and let you know how it goes.Thanks for sharing truly!

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Focus on two key objectives. First, stay protected by learning when to sell stocks to cut losses and capture profits. Second, prepare to profit when the market turns around.I recommend you seek the guidance a broker or financial advisor.

@@Robertgriffinne Whichever option you choose, be careful to seek advice from a trustworthy investment advisor. I do business with one, and she has helped me get a better handle on the stock/ETF market throughout this upheaval.

@@Natalieneptune469 Hello, how did you handle it? I believe I require an advisor after reading these comments about hiring them. Simply said, I don't want to commit errors that will significantly harm me.

@@Robertgriffinne Susan Agnes Hancock is the analyst/investment-adviser. She has been of great help and her tutelage has brought me to a higher understanding of profit generation. You can look up her name on the net for her page and reach out. Understands the job perfectly

@@Natalieneptune469 This recommendation literally came at the right time, I dipped by $11k in stocks last week alone. Its crazy! I just looked up Susan Agnes Hancock online and researched her accreditation. She seem very proficient & I wrote her detailing my Fin-market goals . Information they say, is power. Thanks for this.

The best market strategy at the moment is working with a respected investing coach. I've been in touch with a coach for a time now, mostly because I lack the depth of understanding and mental toughness to deal with these ongoing market conditions. During this recession, I made about $700k, proving that the market is more complicated than most people think.

@@KevinClarke9 Due to the significant falls, I need advice on how to rebuild my portfolio and develop more successful tactics. Where can I find this coach?

I have stayed away from all of the issues that the erratic market presents. Today, reading, research, patience, and seeking guidance when necessary are the greatest ways to break into the market. I merely copy Dawn Maureen Humphrey, a CFA, whose actions I witnessed on Bloomberg Business News because I am unable to handle my portfolio owing to the nature of my profession. Ever since, everything has been easy.

@@KevinClarke9 Wow! I looked up Dawn Maureen Humphrey complete name online just out of curiosity and was pleasantly surprised by her credentials. Thank you for sharing.

​@@KevinClarke9has anyone told you that you look like Scott Morrison. The resemblance is uncanny.

bro i understand with no college i hope thats not ur maximum knowledge

Most newbies either do not understand the power of compound interest, or are just impatient. For the average Joe, however, I think it is just best to invest in the S&P 500, and just wait, which is reliable, albeit extremely long-- lots of years. Or just use a professional analyst and speed up wealth creation. Most people underestimate the power of the latter.

@@sherryie2 It's a delicate season now, so you can do little or nothing on your own. Hence I’ll suggest you get yourself a financial expert that can provide you with valuable financial information and assistance

@@AUstinnesc I actually subscribed for a few trading courses but it didn't help much, been getting suggestions to use a proper financial advisor, how did you go about touching base with your coach?

@@corrySledd I absolutely dislike giving such advice because every person's situation is different. However, there are a lot of independent advisors you might look into. "NICOLE DESIREE SIMON" and I have been working together for nearly four years, and she is excellent. You could proceed with her if she satisfies your discretion. I support her.

@@AUstinnesc I just checked her out and I have sent her an email. I hope she gets back to me soon.

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If it makes you feel any worse, I also understood everything in this video and do not have a 4 year degree at all.

@@3rkid 🤣

@@3rkid Yeah, his logic was really strange. A 4 year economic degree didn't make him understand these basics but he's proud that it helped him to understand this video today. What??

But it is a waste of time.

Me too. I want to build wealth through taking the time and effort to consistently invest but i lack good knowledge and strategy to outperform the market, yielding good returns. I have $60k i want to transfer into an s&s isa but its hard to bite the bullet and do it.

Avoid too-good-to-be-true scam schemes. Seek advice from a fiduciary counselor they provide personalized advice to individuals based on their risk appetite, placing them among the best of the best. There are bad ones, but some with good track records can be very good.

@@DanLeahfort I agree. Based on firsthand encounter with a fiduciary counselor KATHERINE DUFFY BURKE, i have $385k in a well diversified portfolio which has grown by 3x with compounding, venturing doesn’t necessarily boil down to money but you also have to be informed, be patient and back it up with good hands

@@RachelBrinkmeier wow thats a huge milestone. Please how can i reckon with such skillset? i want to grow my emergency funds of approximately $57,000 advantageously

@@RachelBrinkmeier I searched for Katherine using her full name and found her webpage, read her resume, education, qualifications and it was really impressive. She is a fiduciary who will act in my best interest. So, I sent a message and I hope she replies soon

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I've spent the last few years cleaning house, getting rid of all debt. Now i need to get my investment mindset right, I want to start saving for my golden days. I need a sincere and honest advise on this.

The economic hardship, inflation, recession, unemployment and the loss of job caused by covid pandemic is enough to push people into financial ventures. Be that one guy that keeps cool and uses a bear market to your advantage and capitalize long term, by compounding your investments today. Who cares if prices drop more. Know the value of what you own and stay the course. When you're pushing against the crowd and sticking to a disciplined strategy you're going to come out on top of the stack.

@@Americanpatriot723 How can i take advantage of the bear market . I have always thought the stock & crypto market is a fool game just like going to the fair/carnival and trying to win a prize.

@@kashkat987 YES. Building wealth involves developing good habits like regularly putting money away in intervals for solid investments. The crypto market has plenty of opportunities to earn which I myself took advantage of.. I made my first million from going diverse, mainly stocks, ETFs and bonds. It’s a long term plan for me so I invest and re-invest credits to my Financial Advisor *Theresa Mary Chamblee* you can look her up if you care supervision.

@@Americanpatriot723 Thanks i will make my research & also lookup your advisor on the web. I really appreciate the response, you have no clue how much it means.

So the yield stays the same but goes up relatively to the now lower price price ?

@@joe55514 Yes

Or to be more specific, the coupon stays the same.

If the bond was already issued the yields stay the same but the bond will decrease in price if the yield goes higher and increase in price if the yield goes lower. Which makes since, I would pay a higher price for a better yield. Like buying a bond from 1995 in 2010. You would want that 5 percent apy over 0.1 percent.

Yes. This is never explained in videos about bond pricing.

Find stocks with market-beating yields and shares that at least keep pace with the market for a long term.For a successful long-term strategy | recommend you seek the guidance a broker or financial advisor.

I agree. Based on personal experience working with an investment advisor, I currently have $385k in a well-diversified portfolio that has experienced exponential growth. It's not only about having money to invest in stocks, but you also need to be knowledgeable, persistent, and have strong hands to back it up.

Glad to have stumbled on this conversation. Please can you leave the info of your investment advisor here? I'm in dire need for one.

My advisors is Valerie Jean Zwosta. Thank me later.

Thank you for this amazing tip. I just looked the name up, wrote her explaining my financial market goals and scheduled a call

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Two factors impact stock prices: 1. discount rate, as you mentioned. 2. changes in cash flow (INCREASE, in this scenario). If the cash flow outweighs the discount rate impact, then stock prices will increase. If the cash flow does not outweigh the discount rate, then stock prices will decrease. Bottom line: stock prices can move either direction, when bond yields rise. p.s. It took me an hour to figure this out, as I had the same question.

@@larryjones9773 Great 👍 Thanks.

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Came here to see this. Definitely before it’s maturity date lol

Remember that investing in the stock market carries risks, and it’s important to do your own research and consult with a financial advisor before making any investment decisions.

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Bond yields are the minimum yield you can get with theorically "zero risk". So if a company wants to offer a bond, it needs to offer higher yields than the government offers, as there is a higher risk involved. This basic interest rate also has impacts on the costs of borrowing for banks. And if they have to pay more on one side, they will also ask for more in order to offer loans to consumers and corporations. So it is all connected.

Private corporations have to offer higher yields than government bonds in order to attract investors. The difference between a higher yielding, private bond when compared to a government bonds is that the private bond holder can "call back" those bonds at an earlier date so they can save money by issuing a bond at a lower rate. With government bonds, the government can't do that..

Because they are clueless

Higher rates aren't indicative of a good economy. Productivity, low inflation, and low unemployment are indicators of a good economy. Unfortunately, all those things are tied together so when one goes out of whack it affects the others. Its a balancing act.

What's a Waco?

@@MrSupernova111 weighted average cost of capital, essentially the rate at which you discount a company while valuing them. A higher discount rate = lower valuations

@@de3thre3 . Oh. Thanks!

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Yes.

Yes to both

Never speculate on where and when bonds will make a move. Buy the market in live time. Keep buying the market in live time and it'll all work out. I have a large individual issue muni bond position and I always hold to maturity.

As an investor in bonds, you're gambling that the bond interest rate will be a better investment should the bank paying the slightly higher interest rate, all of a sudden decrease their high yield savings account rate. Banks have every right to adjust the interest rate products to their liking since they have to make money. For government bonds, its locked in..

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Dude come on, this is conjecture. You don’t understand what happened in 2007 if you genuinely think that.

@@SuperParkerBrothers the housing bubble of 2008 has been part of my MBA thesis. We have also dissected the scale & financial aftermath of the last recession during the MFIN. Trust me, I perfectly understand what happened and have a very good understanding of what is going on now. My comparison to the 2007 was not in the underlying cause but to the scale and damage that the coming recession will have.

What if I told you…It never pops.

@@user-dw1zb3fh5n One could argue that, but what is meant by the bubble bursting is when the overinflated market value (in comparison to the cumulative book value of all the companies) drops extremely quick, over a short period of time, causing a mass sell-off and inevitably dropping far below the book value.

I think so. The overnight rate.

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As cost of borrowing increases, companies can either increase price of products / fire employees to maintain their operations. That leads to unemployments + the more expensive things are the lesser the spending from consumer, economic growth would halt which in turn will half the inflation rate. Hope this helps :)

Price elasticity is what you’re talking about= How much can a corporation increase the price of a good before people stop buying it. But what we’re seeing so far is that companies have increased the price of goods but people keep buying them, therefore making inflation worse. However, there will be a point where prices increase to such a point that consumers stop buying as much of the product, therefore decreasing demand, therefore helping the supply/demand problem. This would technically help reduce inflation.

Per basic economic theory*, the technical answer is that prices and profit margins (before accounting for interest / taxes) are a function of industry structure/competition, business model / unit economics, and customer value propositions (basically firms will charge as high a price as they can get away with that won’t reduce their overall profits). Capital structure (whether a firm uses debt or equity to finance the firm) will ultimately affect the (after-tax) bottom line but is an independent decision. It is always favorable to use as much debt as the business can support because it boosts equity returns in a tax-advantaged way. If interest rates rise, the amount of debt a business can theoretically support is lower and they will work to reduce their debt rather than raise prices (since if they could’ve raised prices before they already would have). Based on this, you can also see why the economy would theoretically slow when this happens - businesses must deleverage when this happens, so money is flowing towards debt repayment rather than business reinvestment. Further, business expansion is now more expensive as interest rates are higher (if you finance with debt, you pay more interest - financing with equity always more expensive than debt). To boot - there’s also overindebted firms who will struggle / go bankrupt in the higher interest rate environment, presenting a further drag on the economy. *not saying basic in a condescending way - I don’t have an advanced degree in economics, just an undergrad one so I can only speak to the models I learned there. I think there are more elaborate/ realistic models that probably put a finer point on this.

The short answer to your question is yes.

@@GoldenAura32 alright. thanks man.

No one can predict economic performance. You'd need a crystal ball for that.

@@MrSupernova111 do you have one

No, that's wrong.

@@ooluta7578 whats correct then

That illustration confused me too, I assume it’s wrong and infact what really happens is what you mentioned

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what don't you get?

Key takeaway: If bond yields rise, so do interest rates. If interest rates rise, stock prices, especially tech stocks, go down.

me either.

@@DKTrue you missed the part where she said sometimes you see bond yields and stocks both going up at the same time 2:38

She didn't explain the inverse relationship between price of a bond and yield very well either

Aren't they essentially the same thing?

I don't think so. U still get the yield of the original coupon if u hold to maturity.

A bond is a contract with a fixed payment. You don't extra yield when rates change. Your sunk cost is still $1,000. You're trying to roll multiple bond contracts into one. Not how it works.

true

thanks, was looking for the same in the comments.

Stupid comment. This video is specifically discussing bonds. Dalios video is about how the broader economy works. Thus this video is only 5 mins on one subject, Dalios is 30 mins on several subjects.

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Yes, it is compounded, but it can't be higher than the face value, which is the value you will receive when it reaches maturity. So there's always a "discount" if you want to sell it before maturity. And this discount depends on the difference between the yield this bond offered when it was issued and the current available yield. There is something called a primary market, where you buy the bond directly from the government when it is first issued, through auctions. And there's a "secondary market" where these bonds are dailly traded between investors and corporations (including banks). You can ask your bank about how you can buy one.

No, the interest does not get compounded by itself. You get a fixed amount of interest for those years. To make it compound, you need to invest that interest again by yourself.

That is the difference between the coupon rate and the yield. Yield is the coupon rate as a % of the current price, so it varies depending on the price

The video explained that as rates increase in new bonds, existing holders jump ship into the new bonds with higher rates and put downward pressure on older bonds (pricing) which are an overwhelming portion of the market.

You are right, to be a successful person in life requires him or her of hard work and time

Investing in cryptocurrency is the best way of getting ahead to build wealth, investing remains a priority. The stock market has plenty of opportunities to earn a decent Payouts, with the rights skills and proper understanding of how the market works, i pray that anyone who reads this become successful in life.

Exactly, at the moment bitcoin is the best and profitable coin to buy and invest in.

Crypto trading is very profitable when you trade well.

Many of us don't know where to invest our money so We invest it in wrong places and to the wrong people

How will the treasury go belly up?

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