A well known Wall Street saying is the “Bond Guys are the Smartest in the Room”….
Much of this saying comes from the fact that they have less items to deal with…
- Risk of willingness and ability of repayment
- Length of Agreement Ex 1 year or 30 years
- Prevailing Competing Interest Rates
The above is about a two year chart of the 2 and 10 Year Treasury Yield, interest rates tend to be SLOW and steady – Sure rates have increased dramatically as the FOMC (Federal Open Market Committee) has raised rates in staggering fashion….BUT these so called “Smart” guys have tried to call a top in rates multiple times without much success…. Testing their worthiness of the namesake in our opinion….
A bit of technical talk here -For investors, it takes time to get short rates (expecting higher rates) and if rates go against you (lower) and force a cover (buy the short back) it may artificially move rates down fast…but still testing the name sake and resolve!
Have a Great “Throwing the Smartest Guys in the Room Under the Bus” Day!
John A. Kvale CFA, CFP
AI Content Authenticity: All of the following text content has been completed by myself and has not been edited or created by AI. Occasionally we do use AI for images and will note when appropriate.
Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
