Interest Rates & Luck
Two of our topics along
with our quarterly newsletter are, The Interest Rate Yield Curve and Are You
Lucky?
We now have a sharply
rising yield curve which bodes well for the economy.
The yield curve is simply a
graph of interest rates with different maturities. When short term rates are
low, and long term rates are high, you get a steep curve. Normally yields rise
as you move out in time, but the spread we have right now is quite large by
historical standards.
Text book economics suggest
the yield curve is the steepest when the economy is turning the corner for
weakness to strength. The logic is short term rates are low because the economy
isn’t currently strong enough to push them higher; however, long term rates are
higher because investors for see greater economic strength in the future and
therefore demand higher rates of return.
It’s a great theory, but
like things dealing with the future only time will tell if it is accurate this
time around.
Are you lucky? According to
a recent study, there are 4 key principles to being lucky.
- Maximize chance opportunities by being
open-minded, engaging in new experiences, adopting a relaxed attitude
about life, and enlarging your contacts. Focus is good but don’t get so
focused you close yourself to serendipity.
- Improve your decision-making effectiveness by
relying more on your intuition and your gut instincts. Throughout life, we
accumulate a vast amount of information and our brains are good at
detecting patterns and making sense of it.
- Expect good results and it will become a
self-fulfilling prophecy. Dr. Norman Vincent Peale was right—there is
power in positive thinking.
- When you’re in a bad situation, look on the
bright side. Bad things still happen to lucky people but they dwell on the
positive aspects and find ways to improve their situation.
Now the bad news; these
four principles have no effect on your chances of winning the lottery!
Looking forward to hearing
from you with questions or comments.
520.884.7550
jpw@financial-architects.com
2311 E. Broadway