Back in February, I wrote a post called Market took a dive. Here’s what happened to my portfolio and my head. At the time, the market looked like this.
Back then, we could see that the U.S. 10 Year Treasury Yield was gaining speed and people were talking about 4 to 5 % in no time.
Some people even joined the table and started talking about the correlation between REITs, utilities and other high yielding stocks (without knowing the effect of increased interest rates though).
As a consequence of this negativity, many high yielding stock sold off, and we saw low prices on many high-quality assets.
Now, the U.S. 10 Year Treasury Yield is back above 3%, but nobody seems to care.
The utility sector is acting as if nothing happened.
Come on guys, where is the fear? The recent panic? At least stay consistent if you’re going to freak out.
Same with REITs. A huge drop back in February but now everything is normal, right?
Maybe the fear is lagging. Maybe not.
My attention is at least on the U.S. 10 Year Treasury Yield and the correlation with high yielding stocks.
Hopefully, we can see a panic attack soon, and then I will be buying more Dominion Energy. I might also add or initiate a position in NEE, DUKE, AMT or some other high-quality REIT or utility.
Proxy bonds should go down due to higher risk than the risk-free saving rate, but as you say, somehow this doesn’t matter (talking in general, any high yielding asset now).
I mean, almost all high yielding stocks have high debt/equity, less than 1 quick ratios, and current ratios. Seems like the demand for bonds is just too low at the moment, and people actually want more dividend-paying stocks. The volume is really shit too.
I suggest you go and take a look at the article which I wrote at the time.