$NVIDIA (NVDA.US)$ Just for everyone's information, with fed...
$NVIDIA (NVDA.US)$ Just for everyone's information, with fed rate cuts approaching, tech stocks might suffer as there may be a rotation into bonds or other bank stocks whatsoever which due to the rate cuts, becomes cheaper. Just my 2 cents!!
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
Read more
Comment
Sign in to post a comment
103242867 : lol do you know what rate cuts mean
Caladbolg OP 103242867 : Definitely, but do you know the trending for rate cuts? hmmm
10baggerbamm : I think you're a little backwards you see you need to move into bonds prior that means before a rate cut. there's a correlation it's inversely related to between price and yield. when yields go down prices go up therefore you need to be in bonds and realistically longer term bonds before there is a rate cut because after the rate cut the yields will go down and the cost to buy goes up.
103242867 Caladbolg OP : you've literally described the opposite of what happens....clueless
Caladbolg OP 10baggerbamm : Damn that's some confusing things u mentioned but just wanna be safe!!! Trending has been once rate cuts pivot, down the market goes. Hopefully I'm wrong and everyone is happy at the end!!
10baggerbamm Caladbolg OP : it's not confusing it's very transparent it's very straightforward. you need to move further out into the yield curve further out into expiration on fixed income prior to rate cuts. I'm not talking about stocks which people do anyways and all you have to do is look at Philip Morris stock and what it has done over the past several months yes that dog shit cigarette company that everybody says can't keep their dividend at 9.2%, look how much the underlying stock has gone up and that's because money is moving into yield prior to the rate cuts.
so if you're in a fixed income investment and you're buying corporate bonds or treasuries or municipals rather than keep rolling three months to a year at a time you're going to go out 2 to 5 years right now and I know that seems crazy like why would I want to lock my money up for 2 years 3 years 4 years 5 years and a fixed income it only make four and a half percent because when interest rates go down 250 basis points the underlying value of that bond is going to go up by about 12 to 15% plus your dividend /coupon. so the principal value of that Bond if you sell it in the market prior to expiration is going to provide a significant capital gain just like a stock that goes up in value.