Over longer time frames, bonds returns tend to be very close to
their corresponding average interest rates.
Not exact matches
It shows that higher nominal
interest rates historically
corresponded with above
average annual alpha for the HFRI FWI.
From 1962 to 2015, the «true»
average excess return — which excludes the impact of valuations on the returns of stocks and adjusts for the return impact of
interest rate movements on bonds — fell from 2.8 % to 0.8 % on a rolling 15 - year basis.10 The
corresponding 15 - year win rate was halved from 82 % to 43 %, odds not even as good as a coin toss!
The
interesting thing is how these patterns
correspond to changes in global
average temperature.
«Rising
interest rates did seem to have a chilling effect on homebuyers using financing, as evidenced not only by the drop in purchase loan originations but also a
corresponding rise in the share of cash buyers, drop in FHA buyer share and a rise in the
average down payment percentage in the fourth quarter compared to the previous quarter,» Blomquist says.