Dennis Gartman, editor and publisher of The Gartman Letter, on Thursday said that 10-year Treasury yields have the potential to go over 4% by 2019.
“It is still a great game in town, but it is a lesser game than it had been. Earnings have been very strong, but with interest rates going higher and interest rates are going to go higher, I think you are going to see the 10-year well in excess of 4% 18 months from now,” he told FOX Business’ Trish Regan on “The Intelligence Report.”
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Last Friday, the Dow Jones industrial average began its downturn, dropping 666 points, while on Monday it fell a record 1,175 points. In response to the stock market’s plunge, 10-year Treasury yields came close to hitting a four-year high of 2.88%.
Regardless of the market’s volatile state, Gartman advised investors to keep their money in stocks despite the increase in Treasury yields.
“I wouldn’t want to tie my money up for 3% for the next 30 years. There are wonderful little enterprises, wonderful little equities [and] wonderful ETFs that are listed on the New York Stock Exchange that yield 7%, 8%, 9% with a short-term duration. I think that people have to take some scrutiny as to what’s going on and take some defensive actions. I think otherwise they’d be ill advised and I think they’d be upset six months to a year from now,” he said.
Gartman added that bear markets present great opportunities for investors to buy quality stocks at lower prices.
“Bear markets give you great opportunities. Bull markets are the end amidst the volatility, give you a reason to move to the sidelines and anticipate those opportunities that shall come sometime in the future, but not in the next month and not in the next two months, probably sometime in the next year or so,” he said.