US rates surge and most money managers have never had this happen

[bajisima]

Interesting. We all need to readjust to higher interest rates.

Interest rates are hitting multiyear highs at a time when most portfolio managers have never dealt with this phenomenon before.

Most of them have never operated in a rising rates environment. The median tenure of an active equity manager is eight years, according to Fundstrat, citing figures gathered from Morningstar. The last time rates were in a significant uptrend was from 2003 to 2006 before the financial crisis struck.

"There are a lot of people that haven't been through many things in this youthful industry," said Timothy Parton, a portfolio manager at J.P. Morgan. "The time when rates are rising coincides with a period in the cycle that is tough for any manager. You don't want to be too cautious, but you don't want to be too aggressive too early."

https://www.cnbc.com/2018/05/15/us-rates-surge-and-most-portfolio-managers-dont-know-what-to-do.html

 

[Miller47]

That's why it's important to have good money managers taking care of your money.

 

[BigBob]

As long as the economic recovery growth continues the rates will finally be going up regularly to pre bush amounts.

 

[bajisima]

As long as the economic recovery growth continues the rates will finally be going up regularly to pre bush amounts.

Agree and thats a good thing. Its just that so many of us dont remember how to deal with that. We have been spoiled with 3% mortgages and super low auto loans. I had a small CD in college and as I recall it got somewhere around 9% interest. Maybe Americans will save again?

 

[BigLeRoy]

Agree and thats a good thing. Its just that so many of us dont remember how to deal with that. We have been spoiled with 3% mortgages and super low auto loans. I had a small CD in college and as I recall it got somewhere around 9% interest. Maybe Americans will save again?

It would be best if Americans were to GRADUALLY increase their savings rate. What happened in October 2008 was that Americans SUDDENLY increased their rate of saving, becoming suddenly convinced that they were MUCH too far in debt, and that sudden LURCH in saving goes far to account for the unusual severity of the Great Recession, as consumption spending fell off the charts.......