Re:RIP Good Times (2008)
by AnimalMuppet on Thursday May 19, 2022 @05:20PM
(#31440310)
Disclaimer: This is not financial advice. Consult a professional (or several), not some random muppet on HN.
One way to play it is to buy long-term bonds at about the peak of the interest rates. Bond prices are inversely correlated with interest rates; as rates drop, bond prices rise. The longer term gives you a longer lever for the interest rate move to raise the price.
Then, when rates bottom, sell the bonds and buy stocks. [Edit: Because that's the top for the bonds, and usually somewhere around the bottom for the stocks.]
The observant will note that this requires you to know when the interest rates are peaking, and when they are at bottom. There are some technical markers that can give you hints, but the reality is that there is no absolute way of determining these things. They turn out to be informed judgment calls.
One way to play it is to buy long-term bonds at about the peak of the interest rates. Bond prices are inversely correlated with interest rates; as rates drop, bond prices rise. The longer term gives you a longer lever for the interest rate move to raise the price.
Then, when rates bottom, sell the bonds and buy stocks. [Edit: Because that's the top for the bonds, and usually somewhere around the bottom for the stocks.]
The observant will note that this requires you to know when the interest rates are peaking, and when they are at bottom. There are some technical markers that can give you hints, but the reality is that there is no absolute way of determining these things. They turn out to be informed judgment calls.