Interest rate rise will trigger market crash / correction Message Board

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Strategies & Market Trends : Interest rate rise will trigger market crash / correction

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To: JO Irvin who wrote (21)	3/30/1997 10:44:00 AM
From: Mike Robinson	of 52

Can someone 'splain something to me. Why are all the market gooroos spouting the same silly story? They say: "The move over 7 percent in the long bond means that people will move out of stocks into bonds." Makes no sense to me. Most investers hope to achieve a hell of a lot more than a 7 percent return. And we can hardly be accurate enough in our stock predictions to even know if we will beat a 7.0 or 7.1. So why on earth would we jump to bonds? I am certainly not tempted by 7 percent. Furthermore, the 7 percent figure is on the LONG bond. If you buy some of these bonds and rates go up, you lose. Hardly a "safe" 7 percent. And rates going up is what these pundits claim is happening, so how can they councel people to go long on bonds? Looks like suicide to me.

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