Big Tumble in Interest Rates

A fairly sure way to keep interest rates down is to sell off equities HARD.  While there are likely a couple factors to the interest rate fall you can be certain that a fair portion of it is simply a flight to safety.

While lower interest rates may at times be helpful to income securities that is not the case today.  The average preferred and baby bond is off 2 cents in spite of the 10 year tumble to 2.81%.  Sometimes the flight to safety also means tossing the baby out with the bath water which means selling common AND preferred stocks.

Todays move simply shows that an investor can’t focus on any given factor to drive interest rates.  Yesterdays action got the 10 year to close at 2.90%, but that is all forgotten today as talk of a trade war takes the stage.

As an investor that bought our first common stock in October, 1971 these nervous nellies and talking heads drive us a bit crazy and to some degree we long for the olden days when we had to wait for the newspaper to arrive to find out what our stock did the day before.  Given that we probably won’t go back to those days we live with the cards we are dealt.

Reviewing portfolios today we see little damage–a little here and a little there but nothing to get exited about.

We shall see what transpires the rest of the day as the DJIA is off 369 right now and the 10 year treasury is 2.83% (still locked in the 2.8 to 2.9% range).

6 thoughts on “Big Tumble in Interest Rates”

  1. The best that we can hope for right now, I guess… “Reviewing portfolios today we see little damage–a little here and a little there but nothing to get exited about.”

    You said it…

    Very odd how the talking heads on CNBC are twisting this narrative of we are where we are because of the crashing down of tech, aka, Facebook by itself.

    Beyond silly…

    1. Gw–they have to fill airtime with sensational crap. Rehashing stuff to death–so little of substance on there unfortunately.

    2. GW, I checked my spreadsheet returning from the golf course. Im up actually on my preferreds today. Pretty much a normal day. Got my last 200 share fill of AILLL at $26.70, had to pay up to round off my 2500 shares but it hadnt traded in two weeks. Sold several thousand at 27.15 couple months ago and bought most back at 26.30-40. The last 200 were stubborn, so I caved. I felt naked without all my AILLL, my original issue from many years ago.

  2. Hi Jeff–thanks for your kind words. Long ways to go on the site, but I will get there eventually—I’m pretty tenacious on this stuff–now if I didn’t have to work a paying job for a living I would be in heaven.

  3. Tim I like the way you keep us informed. No panic, just good information . Keep it up I like your web site.

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