|
|
| *Ostroff, Fair and Company>>>Investing |
What is the relation between stock market & 10yr bond? |
What is the relation between stock market & 10yr bond? Not exactly, but they behave inversely: 10-yr bond rate depends heavily on Fed rate (an interest rate set by the Federal Reserve). 10-yr bond rate rises when the investors expect a rise in the Fed rate. But the stock market usually declines when the investors expect a rise in the Fed rate, because an increase in the interest rate is not good for stock market investors. It's been happening for the past week. The stock market has been declining because people were expecting a possible rise in the Fed interest rate. Inversely, the 10-yr bond rate has been rising steadily because of that possible rise in the Fed interest rate. Nothing. (Although there are some people who can find correlations between some statistics during carefully selected time periods) The term "stock market" is too vague to be useful. All stocks do not more together over long periods. Stocks are partial ownership of corporations. Bonds are basically a loan to corporations. Stocks are riskier but can grow much more than bonds. The more risk you take, the more money you can make. |
| Tags |
| Renting & Real Estate Personal Finance Investing Insurance Credit |
Finance Categories--Copyright/IP Policy--Contact Webmaster |