Rate accompli: Are rising interest rates bad for all assets?
Many Happy Returns
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What's the Yield Curve Doing?
When the yield curve moves up so interest rates are rising for almost all assets it's bad news. But generally what happens is if you've got a cash flow generating assets in other words it generates a stream of income stretching out potentially infinitely into the future. The really critical thing to understand is that a pound or a dollar in the future is worth less than a pound today. So let's say the interest rates 2% then if I give you a pound today it'll be worth a pound and two pence in a year’s time. If I giveYou a pound in a year's time it's worth roughly 2% less than that today. So it's worth 98 pence
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