Today's chart proves once again betting on higher interest rates is a hard dollar…
Once or twice a year, we remind readers that there are much greener "trading pastures" in the market than making the popular bet on higher interest rates. As Steve pointed out years ago, realtors are the world's worst interest rate forecasters… but they're just barely worse than market gurus and Wall Street analysts who predict where interest rates are headed.
Below is the past seven years of the yield on the benchmark 10-year U.S. Treasury note. This is the most widely followed interest rate in the world… the rate used to set mortgages and car loans.
As you can see from the right side of the chart, the yield recently plummeted below 3.25%… to around the level it was at in 2003 and 2008. Concerns of a slowing economy caused the decline.
We're sure some short-term traders out there are able to make money on interest rate gyrations. But for the majority of folks, it's far easier to profit from things you look at from a value standpoint… like buying cheap oil… buying cheap gold stocks… shorting expensive real estate… buying cheap Asian stocks… and buying blown out natural gas. Leave the interest rate bets to the realtors!
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