Investment Update

October 2018

 

Your FP/CM Newsletter – 3Q18

FP/CM KNOWLEDGE CORNER – THE YIELD CURVE
AARON COHEN, Ph.D., Partner, President, Portfolio Manager

 

One of the most important social functions of financial markets is to provide information through the price-discovery mechanism. Negotiated transactions of all kinds between buyers and sellers provide prices, which give businesses, investors and speculators a picture of supply & demand conditions.

 

Interest rates are prices also, the price-of-money. The price-of-money and its trend gives us an indication of the relative demand for consumption & investment versus savings, in other words, the price that a saver would demand to defer consumption to some point in the future in exchange for a
gain.

 

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