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Pastimes : How to best deal with KOOKS at this web site

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To: Bill Ulrich who wrote (687)7/5/1997 7:54:00 PM
From: Herb Fuller   of 1894
 
MrB , Re:>>(re:lower rates)...and this will slow the stock market down a bit
and at the same time with interest rates being lower this will
support the stock market...<<

Using the flow of funds theory that money gravitates to the best investment at any given time . When money goes from stocks to bonds this will slow down the stockmarket over the short run .

The above movement of funds , from stocks to bonds , will lower interest rates and that in turn will be good for stocks over the long run .

It's conceivable that interest rates will be as much as 1% or more lower a year from now than what they are today caused by the shift of funds from stocks to bonds .

What many people cannot concieve is that money is a commodity onto itself and the more there is of it the cheaper it will be to borrow money . When you have money chasing bonds the interest rates will have now where to go but down .

Herb
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