So, if you have been watching market news then you may have heard about the dreaded bond yield curve inverse. What does that mean? Well, many use it as an indicator for a looming recession. Basically it means that shorter term Government bonds now have a higher percentage yield than longer term bonds. If we boil it down, big market money thinks of this as a slow down in economic growth, and therefore a recession is looming.
There have been times in the past though, where the inverse occurred but a recession didn’t come until several years later. How will this effect our trading? The good news, it wont. As traders we look for opportunity wherever we can and we do not hold risk (have our money in the market) for very long. Long term investors may see this as a sign to take their money out of equities and put it into stable funds, making the market plunge like we saw in 2008 and previous crashes.
This is just something for your information! It is good to know if you are in the markets. Traders, I hope you all enjoyed your weekend and I will be keeping up with market news!!!!
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