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Dave Nadig
3:28
I'll close with this one, which is a great "101" type question that I think a lot of folks overcomplicate.
At it's simplest, investing is just about tradeoffs.  Finding the best target for your cash for a given risk tollerance, to generate the highest return.
3:29
Given a choice between investments, markets are smart. THey will throw money at the best risk/reward tradeoff.
if government bonds -- basically the most riskless asset -- are at 1%, and expected returns on stocks at todays prices are 5%, well, you just do some analysis
3:30
Is the stock worth the additional risk over the riskless asset?
When the fed jacks rates, it raises rates across any products associated with borrowing
so if they jack the "riskless" asset by 1% to 2%, well, now all of the sudden you might reconsider those stocks.
3:31
Your getting TWICE the return you did a year ago on something with NO more risk!
that's the conventional logic.
(of course, there's always the question of how much an expected rate change is 'priced in' or not)
Hope that helps, and that's going to do it for me today.
3:32
We'll have the transcript up shortly, and everyone, have a safe and happy holiday!  We'll be skipping next week, so we'll see you in two!
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