OTW #83: Best states to retire in, Watch this recession indicator, Recession-resistant portfolio ideas, & more
Important financial events and data to check out over the weekend
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1. Watch this recession indicator.
Over the last two years, economic articles have repeatedly mentioned that the 2-year and 10-year bond yield curve is inverted. When this happens, it makes headlines because an inverted curve is a near-perfect predictor of a recession (see chart below).
A big problem with this indicator, however, is that while it’s good at predicting what will happen (i.e. a recession), it doesn’t tell you when it will occur.
In fact, the yield curve can stay inverted for months, or even years!
For a better signal of when a recession will begin, you’re better off watching for a “dis-inversion.” This refers to when an inverted yield curve returns to a more normal, upward-sloping shape.
Alfonso Peccatiello, founder and CEO of
, provided this thread explaining how effective the yield curve dis-inversion is at predicting when the economy will slow down.Where are we now?
After 27 months of yield-curve inversion, the dis-inversion appears to be underway:
2. Recession-resistant portfolio ideas.
If we do end up in a recession, how should you adjust your investments?
There’s no perfect strategy, but
from provided some excellent recession-resistant portfolio ideas.In this video, Greg shows how you can leverage different ETFs to reduce your risk while still maintaining potential for growth:
3. What are the best states to retire in?
Using data sourced from Bankrate.com, Visual Capitalist created this chart of the 10 best U.S. states to retire in:
The overall rank for each state was calculated across five categories with assigned weights:
Affordability: Cost of living, taxes (40%).
Well-being: Sense of community, entertainment (25%).
Healthcare: Quality, cost, and access to health services (20%).
Weather: Average annual temperatures, natural disasters incidence (10%).
Crime: Property and violent crime rates (5%).
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How many months do you think we have before dis-inversion happens. You can trade it!
The dis-inversion appears to be underway now. The macroecon data seems to be lining up with it too. But these are just signals. Anything from an interest rate cut to the election could easily change the trends.
What are some ways you'd suggest trading it?