Renowned investment advisor and CEO of GK ETF, Ross Gerber, tweeted that he was buying bonds currently at attractive yields. He further noted that he bought treasury bonds for clients maturing within a year with an average yield of 3%. “We are seeing buyers of the 10yr now as we like these yields for long-term income seekers,” Gerber added.
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In a debate on whether the market is convinced about the Federal Reserve’s capability to bring inflation under control, Gerber noted that the 10-year yields should hold around 3.5% if the market is convinced or else go further up if the market is uncertain.
The Twitterati responded with both curiosity and sarcasm. A few inquired about the bonds he was buying, and some even suggested I Bond as a sure-shot bet. An I Bond is an inflation-adjusted U.S. savings bond that is currently paying around a 9.6% annual rate through October.
Meanwhile, several opposed the thesis and said no yield was solid enough to beat the current peak figures of inflation. A handful even asked him why he had lost confidence in his all-time favorite EV and technology stocks like Tesla (TSLA), Arcimoto (FUV), et al.
Gerber stated, “Stock valuations are very compelling if you consider the 10 yr at 3.5%, Mortgages at 5% and stocks earnings yield at 6.1% plus dividends of 2%.” This statement was also followed by unpleasant posts stating that mortgages were already above 6% and that dividends are not added to earnings yield, they are in fact a part of it.
While it is difficult to gauge and time the market at these uncertain times, investment advisors are facing the brunt of their sometimes-wrong investment choices.
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