News from Schott Financial Management

A Timely Opportunity

Jun 28, 2023

I’m happy to report that the debt ceiling has been raised and an impending financial crisis averted. For now. Some say we are kicking the can down the road until 2025. In addition, The Federal Reserve hinted at taking a pause on rate hikes. This is positive news for both the market and investors.

As I mentioned in a letter to clients at the first of this year, yields are something to pay attention to. With the Federal Reserve set to pause rate hikes, there’s a very timely opportunity on the horizon: bonds. Bonds offer yields at the highest rates in a decade, 6 or 7%. Now is a great time to lock in these higher rates, as a bond’s value usually increases when interest rates go down. If the US enters into a recession, the Federal Reserve will start lowering interest rates, and this opportunity will be gone.

If you have cash sitting in savings, the average yield on those savings is low compared to a bond yield of 6 or 7%. Bonds allow your money to work for you, thus avoiding the risks associated with a volatile stock market. If you want to lock in these yields before rates go down, please call our office.

Securities offered through Registered Representatives of Cambridge Investment Research, Inc., a broker-dealer, member FINRA/SIPC. Advisory services offered through Stephen Schott, a Registered Investment Adviser. Schott Financial Management and Cambridge are not affiliated.