TLT fell hard on Tuesday, September 2, losing almost $3 per share, and the downturn was still happening on Wednesday morning at the market open. It currently looks like bond prices peak when the interest rate on the ten-year treasury bond falls to 2.34%. I have not seen it go any lower than that recently, and the interest rate is now going up.
Moreover, the economy is continuing to improve dramatically. The ISM Manufacturing Report came in at 59.0 on Tuesday, September 2, and it has not been that high in a long time. So, there is a near zero chance for a recession. This is positive for stocks even while they are overbought. Therefore, I have reduced my long term bond stocks, TLT and TMF, by around half.
What did I do with that money? I bought GoPro (GPRO) stock for one selection because small cameras are a big deal nowadays, especially since police officers will probably have to start wearing body cameras. Secondly, I bought more Armour Residential (ARR) because this REIT stock pays 14% annually in monthly installments. I believe both of these stocks will beat the S&P 500 during the next 12 months.
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