The Bond Yield Curve Inversion And Investment Choices Simply Explained

by Jonathan Adams
Yield Curve


What The Yield Curve ‘Indicator’ Really Means & Why Investors Should Keep Calm & Carry On

The month of August 2019 has seen the financial press and pages dominated by the term ‘yield curve inversion’ and ‘inverted yield curve’. The event is being touted as a strong indication that a global recession is approaching. That’s based on the fact that 7 of the last 9 recessions were preceded by financial markets triggering the same phenomenon.

For many investors, what the term actually means and why its occurrence is so significant won’t be entirely clear. Others will be left wondering just how reliable an indicator the inversion really is? And there is of course the question of what, if anything, investors should do about it. Should you take action, completely ignore the noise or adopt an approach that falls somewhere in between? As always, the devil is in the detail.

In the report we’ll take a closer look at and simply explain:

  • What The Yield Curve Is and What ‘Yield Curve Inversion’ Means
  • Why Is A Yield Curve Inversion Considered A Recession Indicator?
  • Is A Yield Curve Inversion Always Followed By A Recession?
  • Why The Recent Yield Curve Inversions Doesn’t Guarantee a Recession
  • Should Investors React?
  • Investors Who Should Keep Calm and Carry On
  • Investors Who Might Consider Rebalancing & How

This article is for information purposes only.
Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.
There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.

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