Warren Buffett’s wisdom is often most prescient at times of market turbulence, capturing the imperative to exercise non-emotional, clear minded investment judgement when market noise is deafening: “We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.”
Haven Asset Mavens
One of the more remarkable outcomes of coronavirus related capital flows is the insatiable market thirst for haven assets, those perceived as a refuge in a risk off environment. Prominently perched at the top of the haven asset class is U.S. Treasury bonds. The COVID-19 flight to quality is manifest in 10-year Treasuries now trading substantially below 1% (79 bps to be precise as we penned this piece) for the first time ever; yes, ever includes the span of the late 1920’s/early 30’s Great Depression. Chart 1 (courtesy data provided by Strategas Research) depicts the long term trend in 10-year Treasury rates.
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