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Thank you Sven. I enjoyed listening to (and trying to keep up with) @davidsherman too. I'll have to request him for another such opportunity to help the readers parse current market environment.
In light of this year interest rate environment, RSIIX has done exceptionally well with little volatility. Who would guess that quantitative tightening is affecting the longer end of bonds. Your interview was most insightfully and I really appreciate that.
A broad-brush approach to the issues of interest rates and bonds, and how they intertwine with different investors’ approaches, needs and expectations. I’m left with the overarching sense that over time all assets are interconnected. Valuations / expectations for one asset class or segment of the economy eventually spill over and affect others. The process can seem excruciatingly long. In keeping with Devo’s Carl Sagan analogy - the orbital path of the Earth around the Sun is influenced to some degree by every other body in the universe, slight though the gravitational pull might be.
Does a 5% rate on cash represent a “good” investment? How about 7%? I’ve witnessed 15-20% in my lifetime (which may help explain my slumberous response to 5%). None of these rates is in itself “good” or “bad.” It’s the broader picture and context that matter to investors. Albeit, there’s been a lot of attention paid to the “rate of inflation”. That’s an important consideration. But, like the universe, the ultimate ramifications of today’s interest rate / bond markets and what they mean to investors going forward are far reaching and largely unknown.
Thank you @hank. These really are humbling times in the market. There is so much to understand and forces have gotten complex enough that no one has a good pulse on all of it. In such times, as an investor, paying attention to what we are buying, the valuations, and keeping it simple is crucial. Perhaps keeping it simple is THE most important thing we can do.
Comments
A broad-brush approach to the issues of interest rates and bonds, and how they intertwine with different investors’ approaches, needs and expectations. I’m left with the overarching sense that over time all assets are interconnected. Valuations / expectations for one asset class or segment of the economy eventually spill over and affect others. The process can seem excruciatingly long. In keeping with Devo’s Carl Sagan analogy - the orbital path of the Earth around the Sun is influenced to some degree by every other body in the universe, slight though the gravitational pull might be.
Does a 5% rate on cash represent a “good” investment? How about 7%? I’ve witnessed 15-20% in my lifetime (which may help explain my slumberous response to 5%). None of these rates is in itself “good” or “bad.” It’s the broader picture and context that matter to investors. Albeit, there’s been a lot of attention paid to the “rate of inflation”. That’s an important consideration. But, like the universe, the ultimate ramifications of today’s interest rate / bond markets and what they mean to investors going forward are far reaching and largely unknown.