exactly regarding those higher yields. A good example I saw was
that 1 year ago if one had $10 million, he/she would make about
$70K/Year in interest income form Treasuries. Now that same $10M
will make $500K a year - that's a massive difference and for many
well to do folks or families, or someone who sold a company
recently, or inherited money - that kind of return now might be
enough for them to live on just the interest and NOT both to put it
into the stock market. Basically it takes supply away from
the market that was forced into the market when rates were 0.5%
etc.
Yes and let's not forget the cost of financing (and living
expenses) with higher rates (and inflation) and how that impacts
the savings of ORDINARY people - they are having trouble meeting
expenses let alone having money to invest. Do the math on the
cost of a mortgage or car loan today (just the increase in
interest) not to mention the 10 plus percent inflation (6 percent
is a joke if you really check into the true number not as
calculated by CPI - hell they don't even include the cost of a
home). I'm not worried about those with $25 million accounts
but those in the middle class and lower.
exactly regarding those higher yields.
SPX Views
Posted by matt on 2nd of Apr 2023 at 09:07 pm
exactly regarding those higher yields. A good example I saw was that 1 year ago if one had $10 million, he/she would make about $70K/Year in interest income form Treasuries. Now that same $10M will make $500K a year - that's a massive difference and for many well to do folks or families, or someone who sold a company recently, or inherited money - that kind of return now might be enough for them to live on just the interest and NOT both to put it into the stock market. Basically it takes supply away from the market that was forced into the market when rates were 0.5% etc.
Yes and let's not forget
Posted by steve on 2nd of Apr 2023 at 09:23 pm
Yes and let's not forget the cost of financing (and living expenses) with higher rates (and inflation) and how that impacts the savings of ORDINARY people - they are having trouble meeting expenses let alone having money to invest. Do the math on the cost of a mortgage or car loan today (just the increase in interest) not to mention the 10 plus percent inflation (6 percent is a joke if you really check into the true number not as calculated by CPI - hell they don't even include the cost of a home). I'm not worried about those with $25 million accounts but those in the middle class and lower.
Great point Matt. Some of
Posted by arun on 2nd of Apr 2023 at 09:09 pm
Great point Matt. Some of my colleagues have 25M plus accounts and this is exactly what they have been doing.