Inverted Interest Rates

Inverted interest rates? What's that? Who cares? Even if you don't understand what Mr. Greenspan is saying (and almost nobody does) it is important to you because it could mean you might lose you job next year or have to cut back on some of the things you want to acquire.

It really is very simple, but most of the media broadcasters don't understand it because they are reading from a script written by someone else who doesn't understand it either. Let me take a whack at explaining it in plain language.

There are two kinds of interest rates ? short term and long term. The amount of interest paid has to do with the amount of time that is involved. We are talking about long term and short term bonds that pay dividends. If you lend me a thousand dollars with the agreement I will pay you back in one year you can easily understand that the risk is less than if I agree to pay you back in 20 years. The amount of risk is reflected in the rate of interest. Longer is higher and shorter is lower. Pretty simple.

Now we throw the monkey wrench into the machinery. Greenspan arbitrarily sets interest rates rather than letting the market place determine them. The so-called Fed Funds rate is the short-term interest rate set by Greenspan that banks charge each other when one bank loans to another or from the Fed. The basic policy of banks is to borrow short and loan long. That means they borrow money at lower rates (5%) and loan out at higher long-term rates (6%). Unfortunately, we now have the monkey wrench that is ruining the machinery because the short-term rate is higher than the long-term rates.

This effectively cuts down on the amount of money banks have to loan and means the banks must cut back on loans for new business and loans for old business expansion. This is a very effective tool that our big money guru is using. Big G has said he wants to slow down the economy and he is doing it. He thinks a 2 ½% growth is fast enough; however, when you slow to 2 ½% from 6% that is 58%. Too much, too fast. What would happens if your company had 58% reduction in growth?

Money is the lifeblood of our economy. When you curtail the money flow it is like a person having congestive heart failure. Some people die and some businesses go bankrupt, but both must slow down drastically.

The amount of money flowing in our economy must be increased and the quickest way to do it is for Greenspan to reverse his course and start lowering the rates. Most of this break in the stock market can be laid at the doorstep of Mr. Greenspan. His micromanaging can lead to a recession.

Al Thomas' book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter at http://www.mutualfundmagic.com and discover why he's the man that Wall Street does not want you to know.

Copyright 2005

[email protected]; 1-888-345-7870

In The News:

Stock Mutual Funds Dominate List Of Best Funds For 2019  Investor's Business DailyWhen looking to add investments to your portfolio, you might want to start with the best stock mutual funds listed in the IBD Best Mutual Funds Awards for 2019.
What is Smallcase? Should you invest in stocks via these?  Economic TimesOne invests in the market either by buying individual stocks through a broker or by putting money in equity funds or exchange traded funds. Brokerages are now ...
What top 5 money managers bought and sold in February  Economic TimesFebruary was the fourth consecutive month of decline in net investment into equity mutual funds.
Planning To Invest Your Money? Here's A Beginner's Guide  NDTV NewsMoney lying idle in a bank account earns a nominal interest. Financial experts advise investors to park their wealth in schemes that offer higher returns. However ...
The Mutual Fund Show: Should You Invest In A Smart Beta Fund?  BloombergQuintAs stock markets evolve, so do the methods or ways to invest in them. A smart beta fund, often powered by computer algorithms, combines the benefits of ...
From Axis to ICICI: Mutual funds lap up private bank stocks ahead of rally  Business StandardDomestic money managers aggressively bought shares of private sector banks in February. Kotak Mahindra Bank and Axis Bank were the two most-bought ...
Mutual Funds increase holding in ‘attractively valued’ oil & gas stocks  Economic TimesMUMBAI: Mutual funds have been adding shares of oil and gas companies such as GAIL, HPCL, BPCL and ONGC over the last few months, encouraged by ...
Funds lap up select PSU stocks on valuation comfort  Economic TimesHere are five PSU stocks which have got large amount of buying from fund managers in Feb.
Here's a list of top stocks bought and sold by mutual funds in February  CNBCTV18Indian shares were flat—down 0.4 percent—for the third consecutive month in February 2019, as the street exercised caution amid a flurry of unsupportive ...
Why it is a bad idea to always look for outperformers while investing in mutual funds  Economic TimesOne of the most important features that any investor, wealth adviser or anyone in the financial media looks for in an investment product is its track record in ...
Few people actually know how much return their investments in different assets are giving  Economic TimesMany investors dont have a clear understanding of fundamental concepts like returns. However, they cannot be blamed for it.
Market Movers: What changed for D-Street while you were sleeping  Economic TimesAsian stocks tumbled this morning. Will domestic equities hold ground?
Investment limits Sebi prescribes for mutual funds  LivemintDid you know that there are guard rails that the Securities and Exchange Board of India (Sebi) has put in place to protect you from the risks of over-exposure to a ...
Best Mutual Funds 2019 Awards Spotlight Top Market-Beating Funds Of All Kinds  Investor's Business DailyAre you looking for funds that beat the market recently and have great long-term returns too? Check out the winners of IBD's Best Mutual Funds 2019 Awards.
How to Start Investing and Build Personal Wealth  TheStreet.comStart investing as soon as possible and watch your personal wealth increase over time....SCHW.
Large-Cap Mutual Funds: Big Inflows, Small Returns  BloombergQuintA tough 2018 has brought the average one-year alpha of large-cap mutual funds down to (-)7 percent. In fact, one-year alpha of large-cap funds has been ...
Stocks To Watch: Dr. Reddy’s, Tata Motors, Reliance Industries, SBI  BloombergQuintStocks in Asia tracked heavy losses in U.S. equities as bond yields continued to march lower amid concerns that momentum is slowing in the global economy.
Why investors should consider buying stock in the fund company, not the fund  MarketWatchThese investing and stock-market stories offer tips and ideas about what to watch for — and watch out for — when it comes to your money.
Junior Gold Miners, Egyptian Stocks And E-Sports: Exotic Investing For Everyone  ForbesJan van Eck's strategy is to find a twilight zone midway between active and passive management. The result: hot funds that dare to be different.
Tax saving: Here are Dhirendra Kumar’s 4 favourite ELSS funds  Economic TimesThe long-term nature of such investments can well turn out to be a huge retirement corpus, if this is the only investment that you make, said Dhirendra Kumar, ...
Fund investors flee stocks for bonds even as equities have best quarter in years  MarketWatchInvestors around the globe withdrew money from equity funds in the week ended March 20, continuing a trend that has colored stock markets since the start of ...
Chinese seafood stocks miss bull run in stock market  SeafoodSourceChina's stock markets are going through a bull run, but seafood firms haven't been invited to the party.
What’s Distorting Stock Prices At The Time Of Relisting  BloombergQuintArvind Fashions Ltd., the retailing arm carved out of the Lalbhai Group, relisted on stock exchanges at about Rs 590 apiece, and then surged the maximum 5 ...
Here's why carnage in mid & small-cap stocks hit hybrid aggressive funds  Moneycontrol.comOn average, funds held about 20 percent of their portfolio in mid-and-small-cap stocks over 2018. This share may not seem high. But, with the extent of midcap ...
From best to worst, India's stock market sets off alarm bells  Economic TimesIndia has wiped out $113 billion this year after winning the regional equity crown in 2018.
Investor rush for high dividend yield stocks lifts Bharat 22 ETF returns  Economic TimesMany of the cash-rich PSU stocks that are part of Bharat 22 are high dividend yield companies.
Star Trader's China Stock Fund Lures $10 Billion in 10 Hours  BloombergIt took just 10 hours for a star Chinese stock picker to attract more than 70 billion yuan ($10 billion) of orders for his new firm's debut mutual fund, the latest sign of ...
U.S. investors jump back into domestic stock funds as market rallies  ReutersU.S. investors jumped back into domestic stock funds during the week that ended Feb. 20 amid the best start to a year for the S&P 500 since 1987, breaking a ...
3 Hartford Mutual Funds to Buy Now  NasdaqHartford Funds, a segment of The Hartford Financial Services Group, Inc. (HIG), has total assets of around $104.8 billion under management (as of Dec.
How to Evaluate Funds that Invest in Women  U.S. News & World ReportInvesting in mutual funds and exchange-traded funds that promote environmental, social and governance policies allows people to try and align their ...
Investor beware: Here are some reasons why you may want to rethink investing in that IPO  CNBCIf the buzz around brand name IPOs such as Uber and Lyft has you wondering how you can get in, you may want to reconsider. Experts weigh in on when and ...
Long-Term Prospects for Emerging Markets Puts 3 Funds on Top  Zacks.comEmerging markets to outgrow American markets on the back of Fed's dovish outlook and a possible resolution to the U.S.-China trade war.
Govt tweaks rules, increases limit to disclose investment in stocks, mutual funds for employees  Economic TimesNew Delhi: The Centre has increased the over 26-year-old monetary limit on disclosure of investment in shares and mutual funds by employees to six months of ...
7 stocks most favoured by mutual funds over last one year  Economic TimesAs the markets hit a speed bump, stocks favoured by mutual funds appear to be safer bets.
3 Retirement Saver Portfolios for Minimalists  Morningstar.comToo busy to mind your portfolio? Three basic building blocks provide you with all the diversification you need.
Mutual funds bet big on these 30 stocks in November; do you own any?  Moneycontrol.comMF industry assets grew to Rs 23.4 lakh crore, on the back of improved inflows into liquid funds and steady equity markets.
Can mutual funds give multibagger returns like stocks?  Economic TimesStocks can be multibaggers. They can offer extraordinary returns in a very short period. Can mutual funds ever do that? This was a question thrown at Rajeev ...
Check out what top five mutual funds bought & sold during October selloff  Economic TimesNEW DELHI: Mutual funds stood resilient as industry's asset base increased to Rs 22.23 lakh crore in October in spite of a heavy correction in the domestic ...
Even some capitalists are in favor of breaking up Big Tech  CNNNew York (CNN Business) 1. Tech backlash: Even some capitalists fear that Silicon Valley today resembles a playground basketball game: The players are ...
How income from stocks and mutual funds are taxed for an individual  Moneycontrol.comCapital gains from transfer of unlisted share are considered as STCG where period of holding is less than or equal to 24 months, and LTCG when holding period ...
Fund managers ready to go shopping after sharp correction in stocks  Moneycontrol.comMutual funds that were holding around 8-10 percent cash level in their equity portfolio are likely to purchase shares of companies in banking and financial ...
What top mutual funds bought and sold last month  LivemintMumbai: Inflows into Indian equity mutual funds in January were the smallest in two years as heightened market volatility and political uncertainty cooled ...
The dangers of high mutual fund inflows  LivemintMutual funds have put ₹2.4 trillion into markets in the last two years.Equity mutual funds receive ₹8000 crore monthly through SIPs.
Mutual funds' exposure to banks hits 3-month low of Rs 1.88 lakh crore in Sept  Economic TimesMutual funds' holding of banking stocks declined by over Rs 21,600 crore to Rs 1.88 lakh crore in September, driven by the correction in equity markets.
SIPP versus ISA: what's the difference and what are the tax perks?  Motley Fool UKConfused about the differences between a SIPP and an ISA and the different tax benefits? Here's a closer look at the benefits of each investment.
How stocks picked by mutual funds over 2014 to 2017 have performed  Economic TimesWhile the most wanted stocks of 2014 and 2015 have done well, the recent picks have disappointed.
Shall I buy the HDFC AMC stock or mutual fund?  LivemintThe HDFC Asset Management Co. Ltd stock closed 65% up on the first day of listing over its IPO price of ₹ 1,100 per share. Investors who sold on day one, saw ...
Gold, mutual funds, equity - where to invest in 2019?  Moneycontrol.comAs we enter 2019, the question on everyone's mind is: can we say goodbye to market volatility that 2018 unleashed upon us? The answer may not be that simple ...
New stock ideas boost equity mutual fund portfolios  LivemintThe sharp spurt in assets under management (AUM) in mutual funds in recent years appears to have compelled fund managers to venture out of their comfort ...
Is it a good time to invest in small-cap mutual fund schemes?  Economic TimesBears have taken control of the small and mid-cap territories in the stock markets. The Nifty Smallcap100 index has plunged nearly 27% this year, after a 3-4 ...
Mutual funds may need smart bets on smallcap stocks to beat ETF show  Economic TimesSmallcap stocks could see up to ₹1 lakh cr inflow as fund managers look for potential winners: Analysts.
Mutual funds garner over Rs 65,000 crore in Jan  Economic TimesMUMBAI: The mutual fund industry added assets worth Rs 65,439 crore in January 2019, taking total assets under management to Rs 23.37 lakh crore.
Why HDFC Bank stock is among the top picks of mutual funds  Business TodayPrivate sector lender HDFC Bank, the third-largest Indian firm by market capitalisation, is among the favourite stocks in the portfolios of mutual funds. Despite ...
Why stopping mutual fund SIPs when stock market falls can jeopardise your financial goals  Economic TimesFear has returned to Dalal Street. Caught in a perfect storm of weak macroeconomic numbers, the IL&FS crisis and fear of more defaults, equity markets have ...
Why stock market volatility is beneficial for mutual fund SIP investors  Economic TimesWhile investing through systematic investment plans, you make more money precisely because the markets are facing volatility.
27-year-old rule changed: Disclosure limit on MF, stock investment up for bureaucrats  Economic TimesGroup A and B officials had to intimate government if total transaction in shares or MFs exceeded Rs 50K.
Does it make sense to invest in mutual funds when the markets are down?  Economic TimesI am looking to invest Rs 20,000 per month via SIP in mutual funds for an investment period of more than 20 years. The idea is to maximize wealth to use for my ...
Stock Update: Investors Keen on First Data Corporation (NYSE:FDC) as it Makes Waves With Moves  The Coin GuildMajor market players are buzzing over First Data Corporation (NYSE:FDC) as their share price hit $25.53 at the end of the most recent trading session.
When should you sell your mutual fund schemes? - Stocks and equity mutual funds are different  Economic TimesInvesting in an individual stock and equity mutual fund scheme is different. You must look at various parameters like key ratios while investing in a stock. Hence ...
Mutual fund investing for the conservative: Should you stick to largecap funds only?  Moneycontrol.comFinancial planners advocate investing in equity mutual funds to beat inflation and build a corpus that will cater to one's future needs, even if one is a conservative ...
Stock Review: Investors Taking a Second Look at Banc of California, Inc. (NYSE:BANC) After Recent Market Moves  The Coin GuildMajor market players are buzzing over Banc of California, Inc. (NYSE:BANC) as their share price hit $13.81 at the end of the most recent trading session.
Stock Watch: Investors Keen on The Ultimate Software Group, Inc. (NASDAQ:ULTI) as it Makes Headlines With Moves  The Coin GuildMajor market players are buzzing over The Ultimate Software Group, Inc. (NASDAQ:ULTI) as their share price hit $330.94 at the end of the most recent trading ...
What India's top three MFs bought and sold in January  Economic TimesStock funds took in a net Rs 6160 crore, the least since January 2017.
Hot and Cold Stocks of Mutual Funds in November 2018  MoneylifeIn November 2018, Axis Bank and ICICI Bank were the most preferred stocks of Indian mutual funds.
Hot and Cold Stocks of Mutual Funds in January 2019  MoneylifeIn January 2019, Axis Bank and HDFC Bank were the most preferred stocks of Indian mutual funds.
Stock Review: Investors Keen on Broadridge Financial Solutions, Inc. (NYSE:BR) as it Makes Waves With Moves  The Coin GuildMajor market players are buzzing over Broadridge Financial Solutions, Inc. (NYSE:BR) as their share price hit $102.78 at the end of the most recent trading ...
Sebi issues new format for mutual funds' monthly report  Economic TimesFrom April 2019 onwards, AMCs will have to submit the MCR to Sebi in the new format by the third working day of each month.
Flows to India equity mutual funds smallest in 23 months as demand cool  LivemintMumbai: Flows into Indian equity mutual funds in December were the smallest in almost two years as increased market volatility and political uncertainty cooled ...
Is your mutual fund buying or selling stocks too much?  LivemintA mutual fund scheme's turnover ratio tells you how frequently its fund manager buys and sells the underlying stocks. Typically, higher the turnover ratio, more ...
How your mutual funds played the balancing act during stocks crash  Economic TimesBy Bhavana Acharya The last three months has been a bumpy ride for largecap stocks. The year so far has been unkind to the midcap and smallcap set.
Quantum Mutual Fund uses cash pile to buy stocks cheap  Economic TimesQuantum Long Term Equity Value Fund, where value investing is the pronounced fund allocation theme, has brought down the level of cash at its plan to the ...
Should you shift from large-cap mutual funds to index funds?  Economic TimesThe index fund category of mutual fund schemes is slowly gaining traction among investors. The fortunes of index funds are changing as not only are they being ...
Mutual funds that destroyed most investor wealth in the September selloff  Economic TimesThe recent selloff in the stock market has raised fears of a rush for redemption in mutual funds.​
Fund managers raised stake in 194 stocks in Dec quarter. Is it a good idea to follow them?  Moneycontrol.comif good or quality stocks are getting hampered with external factors, investors should use the dips to buy into stocks which they think hold long term growth ...
Are mid and small-cap mutual funds holding too many illiquid stocks?  Economic TimesLiquidity has been scarce in Indian capital markets in recent weeks. Mutual funds have also not been spared the pain, with liquid and money market funds ...
How do mutual funds help you to invest better?  Moneycontrol.comMutual funds can provide you products that can meet your financial goals with relatively lesser risk.
Fund managers' picks: Large, mid & smallcap stocks that MFs bought, sold in Dec  Moneycontrol.comMF assets declined to Rs 22.8 lakh crore in December 2018 from Rs 23.4 lakh core in Nov 2018 on the back of moderation in the flows in equity funds and ...
Tata Motors stock crash: Over 200 mutual fund schemes own equity worth Rs 4,000 cr  Moneycontrol.comIn terms of value, more than Rs 4000 crore of mutual fund money is riding on Tata Motors, and approximately Rs 1700 crore in Tata Motors DVR.
Top fund houses are busy lapping up PSUs; what’s behind this new-found love  Economic TimesNEW DELHI: India's top three mutual funds, which manage over Rs 9 lakh crore in debt and equity assets, added a number of PSU stocks to their schemes in ...
Mutual fund lesson: What should you do in volatile markets?  Moneycontrol.comCost of investing in equities is that it is a volatile asset class- there will be times when your portfolio value will be lower than what you invested.
Picking the best mutual fund: Are past returns relevant after re-categorisation?  Moneycontrol.comWhile selecting a scheme for investment or while deciding whether to continue with a current investment, a fund's performance track record does play a critical ...
At least 100 MF schemes own these stocks; that should mean something, right?  Economic TimesDomestic institutional investors have become one of the key market drivers in recent years.
Is it time to invest in mid cap and small cap mutual fund schemes?  Economic TimesMany market pundits believe this is the right time to enter in small cap and mid cap segments.
Bleeding mutual funds: Should you go back to good old fixed deposits?  Moneycontrol.comAre you worried about the losses on your investments in mutual fund schemes? You are not alone. There are many investors who dumped their good old fixed ...
Mutual funds raise stake in equities to highest-ever level; prefer financials, consumer stocks  Moneycontrol.comDomestic mutual funds (DMFs), the largest buyers of Indian stocks during the quarter, also added the most positions in ICICI Bank and Axis Bank, and reduced ...
Mutual fund holdings in IT stocks touch all-time high  Economic TimesMumbai: Fund managers are betting big on the IT sector, on the back of an improving global macro environment, depreciating rupee and rise in IT spends.
10 small equity mutual funds that have given very good risk-adjusted returns  Economic TimesMany small-sized funds have delivered handsome risk-adjusted returns. Find out why you should not ignore them.
See how they play market crash! MFs sold other stocks to lap up these 21 in October mayhem  Economic TimesPopular beaten-down stocks attracted big money from institutional investors on Dalal Street in October, when the domestic equity market was facing severe ...
Mutual Funds For First Time Manage More Money In Stocks Than Insurers  BloombergQuintMutual funds for the first time manage more money in equities than insurers as the last stock rout erased the gap that started narrowing after demonetisation.
These stocks see mutual fund inflows for 8th straight quarter; are they worth a look?  Economic TimesAt least 20 listed stocks on the BSE have been major beneficiaries.
Canara Robeco MF expects no euphoria before elections; recovery likely in mid & small-cap stocks  Moneycontrol.comNimesh Chandan, Head-Investments (Equities) at Canara Robeco Mutual Fund shares his outlook on markets in an election year and how earnings will drive ...
Best value-oriented equity mutual funds to invest in 2019  Economic TimesValue investing is an investment strategy that looks to buy stocks that are trading below their intrinsic value.
Five stocks that mutual funds think can outperform  Economic TimesA volatile month gave fund managers a chance to cherry-pick stocks.
These are fertile grounds for long-term stock pickers, says Samir Rachh of Reliance Mutual Fund  Economic TimesSmall cap funds are going through a rough patch after a bull run in 2017. etmutualfunds.com spoke to Samir Rachh, fund manager, Reliance Small Cap Fund, ...
Investing in equity mutual funds versus investing in shares: Which is better?  Economic TimesThe final goal for all stock investors is the same: to get superior returns. However, in terms of what you do, there are two completely different routes.
New to stocks? Try aggressive hybrid funds: Dhirendra Kumar  Economic TimesThe promise of a small cap is that they turn out to be a bonanza when they become a midcap or large cap, says Dhirendra Kumar, CEO, Value Research.
Do not make these 7 mistakes while investing in mutual funds  Moneycontrol.comNever forget that you are investing because you have to achieve your financial goals. Investing without a goal is akin to travelling without a destination.
Top mutual funds still have Rs 8,650 crore exposure to DHFL & four group entities  Economic TimesAs skeletons tumble out one after another from the closets of highly leveraged companies, domestic mutual funds with exposure to such entities are finding ...
MNC-themed mutual funds are top performers: Should you buy them?  Economic TimesThe consistent strong performance of MNC themed funds may be a compelling reason for investors to make space in their portfolio for these funds.
Fund managers' bets: Top 10 large, mid and small-cap stocks that MFs bought in October  Moneycontrol.comMF industry assets grew to Rs 22.2 lakh crore on the back of improved inflows into equity-oriented and liquid funds.

Emotional Involvement

I'll bet with almost anyone that has stocks or mutual... Read More

Stock Market Investing Odds

The greatest stock market myth is the idea that investing... Read More

How Covered Calls Turned a Trader Around

Sidney felt sick as she looked at her latest OptionsXpress... Read More

Online Broker Trade History Not Doing the Job

Let me start by saying that...Most online brokers do not... Read More

Stocks & Oil, Sat Jun 18th, 2005

Both the stock market and oil prices rallied recently, which... Read More

No Load Mutual Funds or Exchange Traded Funds (ETFs)?

If you are fed up with early redemption charges and... Read More

Pension Plans

If you have a pension plan at work you will... Read More

Stuff

I continually hear from economists, talking heads, other market letter... Read More

KISS Formula

There are formulas for just about everything, but it has... Read More

Making a Stock Watch List

I am taking the time to help others learn the... Read More

Being Wrong Buying Stock is Okay

Being wrong is OK, but let's not carry it to... Read More

Long Term Financial Vehicles

Investing in long-term financial vehicles give you the most gains... Read More

Discover the Biggest Trading & Investing Online Mistake

Any online investor / trader seeks an excellent off or... Read More

Dont Fight The Fed

One of the great truisms of Wall Street is "Don't... Read More

The Seven Mistakes All Novice Traders Make and How to Correct Them

We learnt the following the hard way! If any of... Read More

VooDoo Training For the Stock Market

If you go to Haiti or other places in the... Read More

War Market

There is no question that the stock market is being... Read More

Online Investing & Stock & Share Trading: 4 Reasons Why Most Online Investors & Traders Go Broke

Are you attracted to the idea of being in control... Read More

Fake Money

Reach in your pocket and take out that big roll... Read More

Laws and Efficiencies and Theories of Diminishing Returns

The basis of diminishing return discussions surround such simple notions;... Read More

Stock Analysis

I receive emails from Morningstar. This company provides statistics and... Read More

Investment Clubs

Because you don't feel too sure about which stock or... Read More

Forecasting the Stock Market

Every day I see in the financial section of newspapers... Read More

How to Read an Annual Report

Every publicly traded company is required by the SEC(Securities and... Read More

Tips to Finding Other People?s Simple Trading Plans

Did you know you can make money (and a lot... Read More