Why Panic and Investing Shouldn't Mix

Editor's Views: More than 10 years on from the financial crisis, investors are now fretting about bonds rather than bad banks, but recession fears may be overblown

Holly Black 16 August, 2019 | 10:37AM

editor

The R word has reared its ugly head this week, after yields on US and UK government bonds inverted for the first time since 2007.

Recession Fears

For the uninitiated, an inverted yield curve means investors receive a greater return for lending their money for, say, two years rather than 10. Crucially, it is often seen as a precursor to a recession because it suggests there is far more to be worried about in the short-term than off into the future – yields come down on the longer-term investments such as 30-year bonds because demand for them is greater as they are perceived as being safer. 

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About Author

Holly Black  is Senior Editor, Morningstar.co.uk

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