Investors seek safe havens as markets, bond yields fall
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Stocks plunged again Tuesday, even after the Federal Reserve unexpectedly cut interest rates. The yield on the benchmark 10-year Treasury bond dipped below 1% Tuesday for the first time.
Yield is the return on your investment when you buy a bond. With yields this low, you’d think investors would be running away from bonds. But not everyone is. Steven Goldberg, a partner at Tweddell Goldberg Wealth Management, said that with all the uncertainty over how COVID-19 will affect the global economy, he’s playing it safe and sticking with bonds.
“So you’re not making up even for inflation over time, but at the same time you’re not losing anything,” Goldberg said.
Goldberg also likes real estate stocks — investments in commercial real estate like warehouses and apartment buildings. Christine Benz, director of personal finance at Morningstar, said some homeowners looking for a safe investment are paying down their mortgages.
“You are getting a guaranteed return on your investment, similar to what you would have on a cash investment, but it’s at a higher rate than you would earn on your cash,” Benz said.
Other investors are turning to gold. As stocks fell Tuesday, the price of gold rose.
COVID-19 Economy FAQs
How many people are flying? Has traveled picked up?
Flying is starting to recover to levels the airline industry hasn’t seen in months. The Transportation Security Administration announced on Oct. 19 that it’s screened more than 1 million passengers on a single day — its highest number since March 17. The TSA also screened more than 6 million passengers last week, its highest weekly volume since the start of the COVID-19 pandemic. While travel is improving, the TSA announcement comes amid warnings that the U.S. is in the third wave of the coronavirus. There are now more than 8 million cases in the country, with more than 219,000 deaths.
How are Americans feeling about their finances?
Nearly half of all Americans would have trouble paying for an unexpected $250 bill and a third of Americans have less income than before the pandemic, according to the latest results of our Marketplace-Edison Poll. Also, 6 in 10 Americans think that race has at least some impact on an individual’s long-term financial situation, but Black respondents are much more likely to think that race has a big impact on a person’s long-term financial situation than white or Hispanic/Latinx respondents.
Find the rest of the poll results here, which cover how Americans have been faring financially about six months into the pandemic, race and equity within the workplace and some of the key issues Trump and Biden supporters are concerned about.
What’s going to happen to retailers, especially with the holiday shopping season approaching?
A report out recently from the accounting consultancy BDO USA said 29 big retailers filed for bankruptcy protection through August. And if bankruptcies continue at that pace, the number could rival the bankruptcies of 2010, after the Great Recession. For retailers, the last three months of this year will be even more critical than usual for their survival as they look for some hope around the holidays.
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