Juicy Estates: Mortgage Blog

What Do 2, 3, 6 and 19 Have In Common And Why Should You Care?

In the past 2 months we have witnessed 19 trading days in the stock market with a 3% move either up or down.  Prior to that it took 6 years to have 19 trading days with moves of that magnitude.  From the sidelines it looks like the traders on Wall Street are……

…..chasing profits on up days and pairing losses on down days.  It is kind of like everyone running back a forth across the deck to the high side of a sinking ship.

This fear based investment management reminds me of one of the greatest investors of all time, Warren Buffet has been quoted as saying ”be fearful when others are greedy and greedy when others are fearful”.  So what do you do when everyone on Wall street is both fearful and greedy?

This question, to which I do not know the answer, brings me to another saying which is “flight to quality”.  This term is a reference to what traders do when the see risks in the economic data that may for tel a drop in stock prices and the way the markets have been behaving (or mis-behaving as it were) perhaps the only prudent thing to do is engage in a flight to mason jars barred in the back yard.

Oh and to answer the question about why you should care….well typically when there is a “flight to quality” mortgage interest rates drop.  So when there are big down days on Wall Street it may be a good time to lock your rate…..then again maybe not.  Shot me an email, put “MBS Chart” in the subject line and I will send you back a 10 day chart of mortgage backed securities pricing and explain how to read it.

This entry was posted on Thursday, October 30th, 2008 at 5:53 pm and is filed under Home, Mortgage News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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