What is the elbow?

The yield elbow is a point along the yield curve that is achieved by the highest interest rates. Basically, the yield elbow is the best opportunity to realize the highest return rate of a number of different types of investment. For this reason, many investors will look at any economic indications that the interest rate associated with the market curve is about to culminate, and accordingly order their purchases and sale. For some securities that are considered very stable, the yield curve is usually referred to as normal. The normal curve results in a relatively flat slope, while the proceeds are no different from the long -term return projection.

On the contrary, the steep yield curve will have an obvious yield to Elluk. This type of curve results in a number of market indicators that predict that the economy will change quite significantly in the short -term horizon. Investors who see the rise of this type in revenue on their investments consider the elbow to be very attractive.

The flat curve suggests that market indicators are somewhat mixed with short -term investment performance. As a result of a lack of clear projection, the elbow with a yield is likely to prove a large part of the peak in the performance of the asset. Investors usually decide to sit on their investments of this type until market indicators provide a certain insight into the trend up or down.

with a reversal yield curve there are some factors that indicate that the overall economic state is likely to deteriorate over time. The yield elbow will be somewhat obvious and much earlier along the slope of the curve. Investors will generally try to sell, while the interest rate is at the best possible position and will use the proceeds to find securities that show a greater promise to generate a higher return rate.

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