Young Research & Publishing Inc.

Investment Research Since 1978

Disclosure

  • About Us
    • Contributors
    • Archives
    • The Final Richard C. Young’s Intelligence Report
    • You’ve Read The Last Issue of Intelligence Report, Now What?
    • Dick Young’s Research Key: Anecdotal Evidence Gathering
    • Crisis at Vanguard
  • Investment Analysis
    • Bonds
    • Currencies and Gold
    • Dividend Investing
    • ETFs & Funds
    • Investment Strategy
    • Retirement Investing
    • Stocks
    • The Efficient Frontier
  • Investment Counsel
  • Dynamic Maximizers®
  • Retirement Compounders®
  • Free Email Signup
  • Dick Young’s Safe America

Yield of Dreams

March 28, 2013 By Young Research

We are now over 1400 days after the official end of the Great Recession, and the Federal Reserve is still holding interest rates at historically low levels. Take a look at the chart below which includes the yield curves at the same number of days after the previous three recessions.

At this point in the recovery period after the 1982 recession, investors were earning between 5 and 6% on short treasuries, and over 8% on 30 year treasuries. A similar but slightly flatter pattern existed in the recovery following the 1990 recession.

During the recovery after the 2001 recession rates were held low for much longer, and the curve was very flat with short rates near 3.5% and 30 year rates near 4.25%. We all know how that turned out. The low rates inflated a housing bubble that blew up in 2007 brining on our next recession.

Today rates near the short end of the curve are essentially zero. Long rates are near 3.25%. So whereas investors were quickly given the opportunity to earn return again after the 1982 and 1990 recessions, since then yield has become increasingly scarce.

The Fed’s stated goal is to push investors into riskier asset classes by keeping rates on safer assets too low to be meaningful. That misguided effort is obviously working as evidenced by stock market indices near their all-time highs. Until the Fed decides to raise rates, savers and lenders will only be able to dream of higher yields on their investments.

charts for yield of dreams

Share this:

  • Email
  • Twitter
  • Facebook

You Might Also Like:

  • Investors Flee High-Yield Debt
  • Is a 3.5% 10-Year Treasury Yield in your Future?
  • Sentiment Change Could Flip Yield-Reaching Market on its Head
  • Author
  • Recent Posts
Young Research
Latest posts by Young Research (see all)
  • Amazon Sneaking Up on Google and Facebook Ad Share - April 8, 2021
  • Businesses Optimistic As States Ease COVID-19 Restrictions - April 6, 2021
  • Germany Finds AstraZeneca Too Risky for People Under 60 - March 30, 2021

Search Young Research

Most Popular

  • It’s as Simple as 4%? No, Not Anymore
  • Is Inflation Imminent? Prepare Now
  • Your Port Against a Storm.
  • Vanguard Wellesley (VWINX) vs. Wellington (VWELX): Which Fund is Best?
  • Long Live the Dividend King
  • Inflation? Yes.
  • Fidelity Investments #1: Hires 4,000 Focuses on YOU
  • The Highest Yielding Dow Stocks
  • Banks Prepare for Boom
  • The Power of a Compound Interest Table

Don’t Miss

Default Risk Among the Many Concerns with Annuities

Risk and Reward: An Efficient Frontier

How to be a Billionaire: Proven Strategies from the Titans of Wealth

Could this Be the Vanguard GNMA Winning Edge?

Cryptocosm and Life After Google

Warning: Avoid Mutual Fund Year End Distributions

Is Gold a Good Long-term Investment?

How to Invest in Gold

Vanguard Wellington (VWELX): The Original Balanced Fund

What is the Best Gold ETF for Investing and Trading?

Procter & Gamble (PG) Stock: The Only True Dividend King

The Dividend King of the North

You’ll Love This if You’re Dreaming of an Active Retirement Life

RSS The Latest at Richardcyoung.com

  • Governor DeSantis: Key West’s Voters Need Your Help
  • Florida, Texas, Montana Against COVID Coercion
  • Parents Rage as Woke Schools Shame White Children as Oppressors
  • All Men Recognize the Right of Revolution
  • The Clock is Ticking: You Must Protect Your Family
  • NBA Engaged in ”Endless Social Justice Warrioring”
  • My Battle-Hardened Stock Market Strategy for the Worst of Times
  • Why Black Lives Matter Needs to Be Shut Down
  • Work to Make Money/Invest to Save Money
  • Key West Greetings From the Thirsty Mermaid

About Us

  • About Young Research
  • Archives
  • Contributors

Our Partners

  • Richard C. Young & Co.
  • Richardcyoung.com

Copyright © 2021 | Terms & Conditions

loading Cancel
Post was not sent - check your email addresses!
Email check failed, please try again
Sorry, your blog cannot share posts by email.