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Biggest Increase in 3 Years; Unpredictability/Timing the Markets

We are seeing the biggest rate increase in 3 years. Investors moved into stocks and out of bonds, and rates climbed. Trump’s promises to cut taxes, to increase government spending and to deregulate were perceived as positive signs by investors.

Investors also perceive inflation risk b/c Trump’s policies might require more government borrowing. Inflation risk pushes rates up, as bond investors demand more yield to offset inflation.

I am going to beat the unpredictability dead horse again, simply b/c it is so shocking how wrong the pollsters and pundits were.

In regard to the election, every major polling organization (and gambling house) predicted Hillary’s victory, by a huge margin in many cases.

In regard to rates, we were told time and again that Trump’s election would result in lower rates b/c nervous investors would move money into the safety of bonds. The exact opposite happened in the extreme.

Our point once again: Nobody can predict anything in this market. Waiting for events to unfold before buying real estate or locking a loan is almost senseless b/c nobody knows what will happen after the events unfold.

Real estate has always been and always will be a great investment over the long haul. There is no reason to try to “time the market” b/c it can’t be done.

Jay Voorhees
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 01524255, NMLS# 335646