August 7th, 2011 8:03 PM by Eric Fang
A lot of clients wrote me emails this weekend about the interest rates trends after S&Pdowngraded USA credit rating. Here is my reply:
1)There will be lots of volatile witherin stock market or bond,ss are the mortgagerates.
2)In The short term, the interest ratewill go up 0.125% to 0.25%; but it willgo back lower to the history low level.
3)The stocks and bonds can not go all the direction all the time. Even if both stocksand bonds sell off Monday, if the stock selloffcontinues, investors will still purchase bonds,which will drive the interest rates lower.
4)US Treasury bonds still the safest investmentthan the bons from other EU countries.
Don't panic if you see your portofio was down5% to 10% last week. The professionals are not doing better. The best strategy now is:holding cash, wait and see.
Have a nice week.