Bond market investors should focus on the front end of the yield curve. This comes from Noah Wise at Allspring Global Investments. Noah Wise. A man whose parents named him after both a biblical boat builder and the thing he'd spend his career pretending to be.
The front end of the yield curve. Not the middle. Not the back. The front. Because apparently the yield curve has the same strategic complexity as a grocery store checkout line. Stand here. Wait here. Watch your portfolio bleed here instead of over there.
Allspring Global Investments used to be Wells Fargo Asset Management before the rebrand. Nothing says "we've learned from our mistakes" like changing your name and hiring a guy named Wise to tell people where to look while the Fed does whatever it was going to do anyway.
The Street anticipates the next Fed meetings. The Street always anticipates the next Fed meetings. The Street anticipated the last Fed meetings. The Street will anticipate Fed meetings in 2047. Anticipation is free. It requires no skill. A goldfish anticipates food when you walk toward the tank.
Here's what focusing on the front end of the yield curve gets you: a different view of the same market that doesn't care what you focus on. It's like watching a car accident from the front instead of the side. Congratulations. You still saw a car accident. Your viewing angle didn't prevent it.
Retail traders will read this headline and think they've discovered something. They'll move their bond allocation. They'll check the two-year Treasury. They'll feel sophisticated. Then they'll check their account in six months and wonder why Noah Wise's wisdom didn't make them rich.
The yield curve doesn't have a good end and a bad end. It has a front and a back, and you're f*cked at both of them equally.
Photo by Markus Spiske on Unsplash
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