Will Ultra-Conservative “Savers” Get the Last Laugh?
Q1 was the “worst total-return quarter” for this asset class since 1980
by Bob Stokes
Updated: April 20, 2021
This era of ultra-low interest rates has been tough for those who choose to put their money into savings accounts or money market funds.
Many people who are financially conservative do not want to risk losing one red cent in the stock market. Some financial risktakers may snicker at such a "fraidy cat" approach, but who knows, the ultra-conservative may get the last laugh.
This quote from our March Elliott Wave Theorist helps explain why:
If the rise in interest rates finally spreads to the short end of the curve so that Treasury bill rates rise, too, it will be a boon for holders of interest-bearing cash equivalents. It hasn't happened yet, but it should.
Our latest, April Elliott Wave Financial Forecast mentions two specific financial vehicles to strongly consider in "a rising rate environment." It also shows subscribers this chart and commentary (entire wave labeling is available to subscribers):
The Elliott Wave Financial Forecast identified the March 9, 2020 top as the end of the 39-year bull market in bonds and has been forecasting the wave structure of the progressing bear market. The first quarter of 2021 was the worst total-return quarter for U.S. Treasuries in 41 years, since 1980, according to the Bloomberg Barclays indexes.
As you probably know, bond prices and yields (or rates) move inversely to each other. In other words, as bond prices have declined, rates have risen.
Getting back to that "last laugh" mentioned in the title, if the Elliott wave model is correct about stock market prices, the financially conservative may see their day in the sun -- and it might arrive sooner than many financial observers expect.
Get our outlook for rates -- as well as the stock market -- inside our Elliott Wave Financial Forecast -- which is part of our flagship investor package.
Get started by following the link below.
Is It Time to “Diversify”?
Scan the financial headlines and you'll find calls for portfolio "re-balancing" or "diversification."
Worries about a "5% -- 10% correction."
What if the stock market falls way more than 5% -- 10%? -- or -- what if other asset classes also fall?
Learn why gold may not be the answer during a stock market downturn -- nor bonds.
Read our Financial Forecast Service for detailed insights.
Follow the link below and you can have our flagship investor package on your computer screen in moments.
Commodity prices have taken a tumble during the past several days. A financial website says the decline is due to the "China crackdown" and "rising dollar." Yet, Elliott wave analysis foretold of the price drop when commodities were still rallying. Take a look at this chart.
See the Trader’s Classroom forecast and Elliott wave pattern that anticipated a rally which saw US Steel nearly double in price.
Ever heard of the acronym FOBI? It was coined here at Elliott Wave International and stands for the "fear of being in." Yes, just the opposite of the better-known acronym FOMO (fear of missing out). Here's an explanation.