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In this post i try to explain that there are not guaranteed investments and even investing in the safest assets are still risky. Bonds determine interest rates - mortgage rates, loans, cars, etc. Growth stocks like low interest rates because they can borrow cash "cheap" and invest in their business. If they borrow money for 1.25%, they expect to be able to generate enough money to pay back the 1.25 and have some left over. The higher the interest rates are, the harder it will be for growth companies to borrow money and generate returns.
Further, the sp500 pays a 1.3% dividend. Once you see the 10 year go above this, you have people jump into bonds to get more rate. Financial institutions and insurance companies, for instance, need guaranteed safe investments.
I hold many inflation protected, government issued bonds and they tend to pay around 4-6%+ APR, which isn't bad. Some of them even hit upwards of 12% APR. :P Much more than I ever saw having a "savings" account, getting that 0.01% on $1,000 (A penny a month, pathetic.)
Good for u:)
Yay! 🤗
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