Investment Strategies

INVESTMENT STRATEGIES:

Safe and Stable Investments- Buy Treasury Bond/Notes

Personal Perspective:

The long term Bond interest rate is standing at 5.12%, which I feel has reached its peak. With economy showing the sign of slowdown and unencouraging job reports I feel that Fed has reached the limit for its rate increase. The maximum upward moment on short term interest rate is 25 basis points, if at all there is any upward moment. However, history has shown us that this rosed interest rates cannot sustain for long time. In my analysis I think that Fed would start decreasing interest rate in a year from now.

Correlation between short term and long term

The short term and the long term interest rates are highly correlated. The long term interest rate has drift and diffussion (volatility) component to it but it is still very correlated to the short term interest rate.