Why Investors Are Obsessed With the Inverted Yield Curve

Рет қаралды 509,208

Күн бұрын

Amid a shaky marketplace, investors are eyeing the yield curve for signs of economic stability. History shows that when the yield curve inverts, a recession may soon follow. Photo Composite: Stephanie Swart for The Wall Street Journal.
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Пікірлер: 459

@Raymondjohn2 Жыл бұрын

Understanding personal finances and investing will most likely lead to greater financial independence. By being knowledgeable about money and investing, individuals can make informed decisions about how to save, spend, and invest their money. A trader made over $350k in this recession influenced market

@Oly_laura Жыл бұрын

Stocks are pretty unstable at the moment, but if you do the right math, you should be just fine. Bloomberg and other finance media have been recording cases of folks gaining over 250k just in a matter of weeks/couple months, so I think there are alot of wealth transfer in this downtime if you know where to look.

@martingiavarini Жыл бұрын

There are actually a lot of ways to make high yields in a crisis, but such trades are best done under the supervision of Financial advisor.

@lipglosskitten2610 Жыл бұрын

The best course of action if you lack market knowledge is to ask a consultant or investing coach for guidance or assistance. Speaking with a consultant helped me stay afloat in the market and grow my portfolio to about 65% since January, even though I know it sounds obvious or generic. I believe that is the most effective way to enter the business at the moment.

@Oly_laura Жыл бұрын

@@lipglosskitten2610 Impressive can you share more info?

@lipglosskitten2610 Жыл бұрын

@@Oly_laura My advisor is ‘’Christine Jane Mclean’’ she’s highly qualified and experienced in the financial market. She has extensive knowledge of portfolio diversity and is considered an expert in the field. I recommend researching her credentials further. She has many years of experience and is a valuable resource for anyone looking to navigate the financial market

@SolomFoz 5 жыл бұрын

We need these educational clips very veey badly. Thank you.

@kozmosnotgay 4 жыл бұрын

I. Fawzy yes.... veey veey badly

@shebanadam7569 3 жыл бұрын

absolutely mate

@pranjalvw2193 5 жыл бұрын

Way more informative than my 3 Days Derivatives and Macroeconomics Class

@arunavasarkar3600 5 жыл бұрын

bengali? nice

4 жыл бұрын

This is why real estate portfolio yields are more attractive for investors and a better hedge against inflation.

@reighn401 4 жыл бұрын

Hehe 😻🐧😿

@MegaPitbull1999 4 жыл бұрын

then you are probably dumb

@ukrd94 4 жыл бұрын

Agreed! I am here because those overly priced 300$books dont explain anything. Mine has repetivitve chapters that mention things but don't explain them

@Mckennie61751 4 ай бұрын

Given the re-inverting yield curve and increased market volatility, I'm reevaluating my portfolios, and the outlook is concerning. How should I reallocate funds within my $1M portfolio to navigate the potential economic downturn?

@WestonScally7614 4 ай бұрын

The inversion implies anticipated lower future growth, potentially resulting in decreased lending and invest-ment. Hence, finding the appropriate asset allocation and collaborating with an advis0r experienced in bear markets is imperative.

@louis71350 4 ай бұрын

Accurate asset allocation is crucial, and some individuals use hedging strategies or allocate part of their portfolio to defensive assets for market downturns. Expert guidance is vital for achieving this. This approach has helped me stay financially secure for over five years, yielding nearly $1 million in returns on investments.

@SageMadsen 4 ай бұрын

I’ve been down a ton, I’m only holding on so I can recoup, I really need help, who is this investment-adviser that guides you

@Mckennie61751 4 ай бұрын

Thank you for the lead. I searched her up, and I have sent her an email. I hope she gets back to me soon.

@ivermektin6874 4 ай бұрын

0TDE options on the SP500

@itstanzy 5 жыл бұрын

This is the best and simplest explanation of yield curve.. Kudos #WSJ

@boricuaboy4e 4 жыл бұрын

Am I the only person wondering why he is pronouncing borrowing are burrowing? 🤣😂

@petemiller2598 4 жыл бұрын

He must be Canadian.

@Wafflelover344 4 жыл бұрын

No you're not was just about to post actually

@Youbeentagged 4 жыл бұрын

It is more buorowing than burrowing

@deeremeyer1749 4 жыл бұрын

@Donald Kasper A "southerner" from southern Manitoba maybe.

@samuelpezzetta7084 5 жыл бұрын

Very informative and straightforward. Thank you!

@hunantrain 7 ай бұрын

THIS used to be one of my most watched YT Fin channels... sadly, it's been a while since i visited it has been a very rough year... i am experiencing one of the toughest phases of my life... Lost a fortune lnvesting in emerging companies. Hopeful, for a turnaround.

@MichaelWeebles 7 ай бұрын

It's the market if you don't leave during the bear, you will be fine. You should have opted for a suitable Ai platform or traded with Gary Joe Wilde, or any other regulated advisor. As a beginner investor myself, I have made over 45K profit in a few months of coping Gary's investing positions.

@YTDataAnalyst 7 ай бұрын

Hi Mike. Any ideas how to reach Gary Joe Wilde? I love the testimonies I have seen about him he seems not to own a video channel here.

@MichaelWeebles 7 ай бұрын

@ bertjames, run a quick web search about him he's sec regulated they aren't permitted to own or operate investing video channel.

@DBAnalyst1 7 ай бұрын

Investing so much in emerging companies is a ridiculously bad strategy you need to balance your portfolio against risk. Investing must be like the healthy food pyramid. BTW, I commend Gary's trading pattern too. Different perspective, different technique

@TheAlexwilhelm 5 жыл бұрын

borrowing not boour-ho-ing

@surfsessions100 5 жыл бұрын

Here here!

@surfsessions100 5 жыл бұрын

Boooering

@benjaminbode 5 жыл бұрын

bouroughiine

@dwpetrak 5 жыл бұрын

For real! I have never hear of bore-o-ing

@maverik15j 5 жыл бұрын

I knew this was going to be the first comment. Thx KZfaq.

@AUstinnesc 8 ай бұрын

I find myself at a crossroads, uncertain whether to liquidate my $150,000 stock portfolio. I'm seeking advice on the best strategy to capitalize on this current market.

@corrySledd 8 ай бұрын

Well the bigger the risk, the bigger the reward and such impeccable decisions are better guided by professionals

@sheltonPston 8 ай бұрын

Yes true, I have been in touch with a financial advisor. With an initial starting reserve of $80k, my advisor chooses the entry and exit commands for my portfolio, which has grown to approximately $550k.

@AUstinnesc 8 ай бұрын

Pls who is this coach that guides you? I’m in dire need of one

@sheltonPston 8 ай бұрын

My consultant is Nicole Desiree Simon She has since provide entry and exit points on the securities I focus on. You can look her up online if you care for supervision.

@AUstinnesc 8 ай бұрын

I Found her online page by searching her full name, I wrote her an email and scheduled a call, hopefully she responds soon. Thanks

@MIchaelGuzman737 9 ай бұрын

To be honest, I'm not sure investing is a wise decision right now. Notice how often things fail. As I still have some time before retirement, I'm looking for a good investment strategy for my money, even though I've read books and articles by well-known investors, past and present. In order to generate passive income, I want to start building a solid and reliable portfolio.

@sommersalt88 9 ай бұрын

I agree with you. The market will always recover. The goal is to find quality stocks with long-term potential. This is difficult for the average person as they have to follow a lot of industry news, do technical and fundamental analysis, etc. It's easier to invest through an advisor who knows how things work and get high returns. Market time is better than market timing. Currently have a $686,000 portfolio that follows these principles.

@MatthewVinson 9 ай бұрын

Can you recommend who your advisor is? I've thought about making the switch as it seems like the most sensible solution out there. I've heard of investors raising hundreds of thousands of dollars despite the downturn.

@sommersalt88 9 ай бұрын

I work with "Jill Marie Carroll". If you wish, you can look her up yourself.

@MatthewVinson 9 ай бұрын

Thank you. I just checked her out. She seems really proficient. I'll follow up with an email. Thanks for the lead.

@jaygupta2875 9 ай бұрын

Whether to invest doesn't depend on the direction of the markets: there are strategies for rising markets, falling markets and flat markets. If you can raise capital to invest, the direction of the markets determines HOW to invest, not whether to invest.

@Natalieneptune469 Жыл бұрын

would recession hurt? I looked at 50 relevant stocks over 2020 and 2008 recession, across the board they all dropped 50-90%. I have deployed 1/4 of my bankroll at -25%. I am slowing buying at -the 40% threshold. Good ships bad ships all go down in low tide. I have ordered to buy at -60%, -70%, -80% and beyond. At the end of the day my average buy in will probably be -50% to -60%. That will turn a 3 bagger to 6x. I will likely start unloading after 2x (4x for me)

@PhilipMurray251 Жыл бұрын

That proves Rick’s hypothesis that nobody can catch the bottom and the top precisely. Winning is secondary for me. Calculating a positive expected value, the Certainty Equivalence and avoiding chance of ruin are more important.

@marianparker7502 Жыл бұрын

@@PhilipMurray251 The lower the market goes, the cheaper everything becomes. You just don't realize it until after the market inevitably recovers.

@Natalieneptune469 Жыл бұрын

@@marianparker7502 I’m Using this period to accumulate more assets, whatever my hands can get on.

@Robertgriffinne Жыл бұрын

@@marianparker7502

@marianparker7502 Жыл бұрын

@@Robertgriffinne This is truly encouraging... How can i reach this FA?

@gewtz Жыл бұрын

in 4 minutes i learned what took me 2 weeks of class. Its so sad how things are explained so terribly in university...

@joellim7010 2 жыл бұрын

This is by far the best explanation for yield curve that I have seen KZfaq. Awesome Job!

@jamesclarity1077 4 жыл бұрын

Here on Aug 14 2019

@sparktheblunt1144 4 жыл бұрын

From the dead huh

@PepsiMan42069 4 жыл бұрын

SparkTheBlunt *WARNING: GROUP MASTURBATION BEGINS IN 10 (TEN) MINUTES*

@HaruSakamoto 4 жыл бұрын

Next one will be at least 10x worse than 2008

@sparktheblunt1144 4 жыл бұрын

Lewis hughes tf u talkn bout

@PepsiMan42069 4 жыл бұрын

SparkTheBlunt surreal joke

@scottk7515 9 ай бұрын

This video is by far the most lucid, well-prepared exposition on yield curves I've seen. Well done, WSJ and thank you.

@AdlinLing 5 жыл бұрын

The Federal Reserve is neither federal nor has any reserves.

@goldrushpro 4 жыл бұрын

It's a private counterfeiting operation that is protected by the violent force mechanism of the "corporation of the united states".

@reillydougherty2166 4 жыл бұрын

@Teringventje the USA doesn't print its own money, the fed reserve does and then we are taxed interest on our own money, every time they print a dollar it becomes weaker and more interest to be paid on it therefore we will always be in debt because the fed is constantly printing money charging us.

@reillydougherty2166 4 жыл бұрын

Teringventje it’s cool you don’t understand how it works and that’s fine

@reillydougherty2166 4 жыл бұрын

Teringventje i already did in simple terms, you can read about the rest

@davidbogaert4611 4 жыл бұрын

G. Edward Griffin- The creature from Jekyll island. If you are really interested in the creation of the Federal Reserve

@workwithnature 5 жыл бұрын

Today already the 3 month and ten year have a strong inversion. The 30 year is barely holding.

@Stinger913 4 жыл бұрын

Is 10 year considered short or long term bonds?

@tonynaq7498 4 жыл бұрын

@@Stinger913 long term

@nekonari22 4 жыл бұрын

This is very helpful. Every time I hear yield curve on NPR’s Indicator podcast, I’ve been scratching my head. This explains those words perfectly. Thanks!

@casperhxr6018 3 жыл бұрын

Hands down the best Yield Curve explanation ever!

@davideg5947 4 жыл бұрын

Everyone should learn this. You would be able to see if your financial advisor is looking for your best interest or has no clue with you hard earned money!!!

@brandonspiegel2293 4 жыл бұрын

I greatly appreciate the knowledge!!!!

@hemantsarthak 5 жыл бұрын

finnally some useful content from WSJ ... srsly guys thank the guy who was the key factor for this video and promote him

@omuribep 5 жыл бұрын

Excellent and really well explained ! Thanks.

@tsemingtsai 4 күн бұрын

Simple and clear. Thanks for the presentation.

@mindsinmotion2825 4 жыл бұрын

This Explaination of what an #invertedyieldcurve is makes the most sense

@durgeshkinnerkar2826 4 жыл бұрын

Please post More of these basic educational clips on economy and stock market......great job

@julianmora5469 5 жыл бұрын

Thanks! Nice video

@wakeupnyc718 5 жыл бұрын

Basically , a fear and greed kinda thing. Great video , made me understand the inverted yield curve way better than the mainstream media.

@21blue64 5 жыл бұрын

This is mainstream media It's the Wall Street Journal

@ryanemeziane7417 4 жыл бұрын

Very nice and clear explanation! Thank you!

@jutikant 4 жыл бұрын

Thank you for this knowledge vdo. This is much easier to understand than what my finance teacher taught in class.

@Anurag-st7wl Жыл бұрын

Bful animations. This is the kind of tech integration we need in our education systems

@JXAR 5 жыл бұрын

Thanks!

@shebanadam7569 3 жыл бұрын

thanks, I quite understand it now.

@simonaubrycpge6032 4 жыл бұрын

Excellent video thx.

@seunwilliams4516 5 жыл бұрын

Best explanation on this topic

@tinnguyen2219 4 жыл бұрын

Thank you so much for sharing this useful data ! Greatly appreciated.

@yaoguoli3955 5 жыл бұрын

Well explained, thanks.

@yosmuc Жыл бұрын

Very clear! Thank you 🙏

@TrailBlazer5280 5 күн бұрын

Whats confusing about the yield curve or yields in general (at least for me) was that no its not the yield changing its the price. The paper has a yield that is set it does not move, but the price you pay makes YOUR yield change. That relationship is the important thing to understand. The price moves like a stock, thus the yield equals something new. Only new issued bonds will have an actual different yield

@minjung5102 Жыл бұрын

Great video!!

@carloseduardonaranjosuarez5917 2 жыл бұрын

Thank you WSJ

@NikolaStamenkovic6 2 жыл бұрын

Wow, straightforward. Good job. Usually wsj hide or misses something but this was nice

@ericholder6923 3 жыл бұрын

Awesome presentation

@nater88dawg 5 жыл бұрын

Incredibly helpful!

@mustbeaweful2504 4 жыл бұрын

I appreciate how this video was constructed for those who haven't a clue (such as myself).

@Justice4x 5 жыл бұрын

This is pretty informative, learned a lot from this than school

@flossenking 4 жыл бұрын

Interessant

@tomlindsay7861 Жыл бұрын

Great explanation. Thank you

@anshulsharma9424 5 жыл бұрын

Very informative 👍

@yakkyuu12 4 жыл бұрын

Just a NOTE to the Wall Street Journal and producers of ALL their FANTASTIC VIDEOS, I will speak out for the many who I don't KNOW , ALL who come here to LEARN AND EVEN QUESTION what you produce!! THANK YOU -- SO MUCH! The education, SPEED of comprehending and CLARITY is FANTASTIC. Your ability to produce this with clarity and to the point, I PROMISE has a LASTING EFFECT! I HOPE just this small gesture of gratitude will help you KNOW the LASTING, in depth knowledge that WILL help so MUCH to the MULTITUDES --- what you do MATTERS, what you RESPONSIBLY, professionally create is important!! It goes along the OLD ADAGE of REAL professional journalism( that there is SO LITTLE of on the internet!!) "We will ONLY print journalism that is FIT to print" I thank you for holding yourself to a STANDARD that is GONE. You are ONE of the FEW sites that is TRUSTWORTHY and WORTHY of our recommending to others, because of the TRUTH and QUALITY of your production and reporting!!!

@404baron 4 жыл бұрын

the price of a bond goes up or down in response to the yield curve not the opposite as you mentioned @wall street journal ! we calculate the price of a bond from the the rate demanded by investors ; for example : if a bond is yielding at 6 % and investors are demanding 7% that will cause the price of the bond to sink to compensate the 1 % difference.

@JohnnyRedmond 4 жыл бұрын

Great info.

@nihaal4783 5 жыл бұрын

Hello, thanks for explaining. Can someone clarify how investors would anticipate a recession when it is themselves who affect the left side of the yield curve by choosing to/ not to invest in long dated bonds? If they are influencing one part of the curve, don't they basically control the narrative of the economy going into recession/ growing?

@michaelhale7802 5 жыл бұрын

Investors aren't a collective - they're individuals (people, businesses, etc.). They make individual predictions based on what they believe is happening in the market. So in a sense, yes they control the narrative, in the same sense that (for example) customers control Walmart's profits. But they have no real leverage as individuals. Additionally, investors react to news. If there's all this buzz going on about a recession coming, and there's good reason to believe so - obviously a large amount of investors are going to start liquidating their equity in companies so they don't incur large losses. No one likes to see their money vanish into thin air.

@misterwonderful8628 5 жыл бұрын

The government needs to control the markets and the economy...they will sometimes suck money out of the market in various ways. This is also accomplished to drive possible antagonists to a better and more stable country market away and find best support at better bid for larger and more involved benefactors and producers in the same economy as an incentive to continue doing such. True captains of industry are the government.

@Dear_Mr._Isaiah_Deringer 5 жыл бұрын

Well there is of course also the supply amount of Bonds, because that is quint essential how government debt is made. Rising Budget deficit means more Bonds are being issued to stuff that Budget gap and vice versa. How the government chooses to issue those Bonds (2y, 5y &10y) is up to the treasury.

@mauriciogonzalez6302 5 жыл бұрын

The very definition of a recession is identified when you have two consecutive periods where gdp falls. So you can’t call anything a “recession” unless it’s already happened.

@iali00 5 жыл бұрын

Great point. The fed could also just cut rates to prevent the inversion. Seems pretty simple to me.

@tomliuyt 5 жыл бұрын

I am impressed with how well it's animated

@Diatom1k 2 жыл бұрын

Amazing to watch from 2022

@akshaykothari93 Жыл бұрын

Brilliant Explanation.

@davisoaresalves5179 Жыл бұрын

Very good video.

@SportsIncorporated 5 жыл бұрын

If the Fed's holding half the long term Treasury bonds. Do you get a true yield curve?

@GauravGupta-gd9wv 4 жыл бұрын

Very nice and brief explanation

@nocthepanafricanistcapital5467 Жыл бұрын

Excellent

@John-yg2rt 5 жыл бұрын

If you have access to a Bloomberg Terminal through your work or university there is a great in-depth explanation of yield curves in the fixed incomes segment of the Bloomberg Market Concepts tutorial

@Stinger913 4 жыл бұрын

Actually?

@dragonhold4 5 жыл бұрын

'Treating the symptom, not the cause.'

@DougOfTheAntarctic 5 жыл бұрын

Good beginner's guide to the yield curve. But I don't go to WSJ for videos pitched so low.

@meghanparry6270 4 жыл бұрын

August 2019 there was yield curve inversion.

@DePalma. 3 жыл бұрын

Great vid...loved the “boooooorowing” Canadian accent lol

@porainnovations 5 жыл бұрын

how u edit ur videos please reply?

@NAWAF-vc1px 5 жыл бұрын

good video

@ytoh6408 4 жыл бұрын

can anyone share a link to a daily chart of the yield curve? I tried searching online but did not find anything similar to the one shown in the video.

@nivethaselvam9318 4 жыл бұрын

Wonderful

@muskduh 10 ай бұрын

thanks =)

@msabedra1 4 жыл бұрын

And we’re inverted woohoo low interest rates coming

@thatguybill34 4 жыл бұрын

Negative Rates are coming

@user-dw4ji5qq5k 4 жыл бұрын

@@thatguybill34 agreed

@HaruSakamoto 4 жыл бұрын

20 trillion dollars printing coming

@flossenking 4 жыл бұрын

@@thatguybill34 and they're here!

@ErikPT 2 жыл бұрын

Who would’ve thought the Inverted yield curve predicted a recession?

@justacitizen111 5 жыл бұрын

What this 4 minute video covered, takes Econ and Finance professors in universities a month to cover and even then they wouldn’t still do as good of a job explaining. Thanks WSJ!

@ErikPT 2 жыл бұрын

What professor did you have? My professor answered all my burning questions even if he was a commercial trader in commodities futures.

@spaceoddity2485 5 жыл бұрын

Very good video. Except I do not know why they are already showing a bar for a recession at the present time. On their 1975 to present yield curve chart.

@asheshshrestha 5 жыл бұрын

more videos like this!

@user-ez2qd9yb7m Жыл бұрын

Watching this now in March 2022, you were right Fed raised the rates and we are observing an inverted yield curve now. Brace for impact 😂 Thank you for explanation!

@PeterSeverinRasmussen 4 ай бұрын

How does the yield curve from the rest of the video relate to the time series "yield curve" at 3:42?

@PeterSeverinRasmussen 4 ай бұрын

Ah, perhaps I can answer myself. The legend says "10-year minus 2-year yield". So perhaps each time step is a snapshot of the right side of a yield curve minus the left side.

@kailiang4160 4 жыл бұрын

Great music

@rajatbabar9438 4 жыл бұрын

GREAT!!!!!!!!!

@lakshaysinghal6167 5 жыл бұрын

I just want to say, Thanks

@MyName-ui5xu Жыл бұрын

Bond. Repayment through interest which called as Yield. Shortage Yield - limit inflation - let more people borrow Unemployment rate Price drop : Yield rise

@CommandoMaster 5 жыл бұрын

Short term savings interest rates are higher than long term interest rates in banks. That's inverted. Good to know.

@superdivinus987 5 жыл бұрын

So, if left side is high, you get good interests, if right side is high, you should invest in markets and stocks

@mistersig 5 жыл бұрын

burrowing or borrowing?

@kingogofbashan5910 5 жыл бұрын

*This comment section is full of people complaining about FED. Without knowing how fed works*

@captnhuffy 5 жыл бұрын

"work" - youre implying that they work. That they are productive, producing something of value.

@sfm8099 4 жыл бұрын

Actually longer the duration of the loan lesser will be the interest rates then why the interest rates for 10 year bonds are higher than bonds having lesser duration than it.

@Rubens_991 5 жыл бұрын

Wow, great and simple explanation. People always forget demand also play a role in the yield curve, not only monetary policy

@Try_ingle 2 жыл бұрын

Do an update for 2022

@begley09 5 жыл бұрын

And now it inverted, what’s your take?

@Galbat0 4 жыл бұрын

Somebody help! How to make videos like this? This is so beautiful. Is there any tutorial channels? Please recommend me

@mirceastaicu4131 Жыл бұрын

I wouldn't call the amount of money an investor earns annually the bond's yield.The amount of money an investor earns annually is called, if I'm not mistaken, the annual coupon payment The Federal Reserve System raises the short term bond yields by purchasing short term bonds through open market operations. Reducing the supply of short term bonds increases their yields because the yield is a result of a bond's market value and its coupon annual payment

@celica96 5 жыл бұрын

So when the economy is healthy, investors don't want to lend the government money on the long term and they're more interested in stocks. This lowers the demand for bonds, and in order for the government to make its bonds more desirable it raises the interest rate so people would buy them. Did I get that right?

@John-yg2rt 5 жыл бұрын

Bonds are considered debt and therefore are obligations, equities (stocks) are not. Because higher risk = higher potential for large return OR large loss, stocks by nature have much more volatility. When the stock market is doing well, companies are doing well, so investing in stocks can get an investor much higher returns. So its not that people don't want to lend to the government when the market is booming, its just that they can earn a lot more in other investments. The Fed primarily changes the "Fed Rate" (the 3month US government bond rate) to control inflation, which is actually good to a certain extent. When inflation gets close to 0 its a sign of a slowing economy, the Fed usually tries to keep inflation around 2% annually