Friday, November 27, 2020

Tag: Capital Preservation Suddenly is a Thing

Amid Market Rout, Decade of “Financial Repression” Ends, Capital Preservation Suddenly is a Thing

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by Wolf Richter, Wolf Street:

This will dog the stock market going forward.

Fixed-income investors – a financially conservative bunch buying Treasury securities, FDIC-insured CDs, and similar products that largely eliminate risk – have been getting crushed for a decade: Except for brief periods when inflation dipped to near zero or below zero, their minuscule returns have been eaten up by inflation, or worse, they lost money after inflation, as was the case with shorter-term Treasuries and just about all savings products. But it has ended.