Yield Hysteria - As interest rates fall, many investors are going through what I call yield hysteria

Invast Investment Committee

Invast Financial Services

Yield Hysteria - As interest rates fall, many investors are going through what I call yield hysteria. It is important to not just focus on the actual yield number received today, but the quality and sustainability of that yield into the future. Your capital is the most important starting point. Assets need to be able to adapt to inflation when rates do rise at some point in the future. This is the difference between high and low quality assets. We feel that rates are near the floor level, underpinned by an Australian economy which will benefit from falling rates, lower fuel prices and a more competitive Aussie dollar. We wrote more on this in our recent blog post here (VIEW LINK)


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