I have to learn a bit more about this as I have never thought of or spent any time understanding what investment in banks means. Life keeps showing me places I am ignorant and needing to learn.
If I get it right, we should expect stakes in banks to do well with high and/or rising interest rates and "less well" with low or falling interest rates. Does that make them the natural hedge against too heavy of a bond allocation (e.g., someone who went too heavy on them and does not want to sell them in the current market but is holding them until rates drop)?
I have to learn a bit more about this as I have never thought of or spent any time understanding what investment in banks means. Life keeps showing me places I am ignorant and needing to learn.
If I get it right, we should expect stakes in banks to do well with high and/or rising interest rates and "less well" with low or falling interest rates. Does that make them the natural hedge against too heavy of a bond allocation (e.g., someone who went too heavy on them and does not want to sell them in the current market but is holding them until rates drop)?