[jyl]

Yield curve inversion (typical is 3 mo to 10 yr) have an excellent record of predicting recessions. I've read that the strongest signal is when the curve remains inverted for 3+ months. This inversion started > 3 mo ago (March 2019?) and seems to be getting deeper.

Every time, various pundits say "its different this time" but, so far, it never is.

The lag from inversion starting to recession starting is variable. Can be 1+ year.

Stock markets top out before recessions start. The lead can be 1 year.

When yield curve inversion starts, you have to figure that stock market top is likely anywhere from imminent to 1 year off.

Investors can get too clever with trying to nail the exact timing of market top. Just accept low confidence on timing but decent confidence on outcome.

I had a frustrating conversation last Tuesday. A client yelled at and fired me (taking his $ elsewhere). He was furious because his portfolio was 15% cash (at yield +2.05%) in an up market. Didn't help to point out that, despite cash, the portfolio was +22% year to date. Well, I'm not exactly upset about the last couple days' action.