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Wisdom of Crowds: What Can We Learn From 8,000 People in 1974?

By Advisor Perspectives
Wealth Management, Financial Services

One of my favorite photos captures a line of over 8,000 people standing outside the Federal Reserve Bank of New York in August 1974 waiting to buy U.S. Treasury securities. With interest rates of 8.5% to 9.0%, investors craved these “high income” investments.

NY_FED

Source: Federal Reserve Bank of New York

The photo seems surreal today. For one thing, no one lines up to buy securities anymore. We’re in a digital world where you can invest at home in your pajamas on a tablet. And 8% to 9% yields for perceived “risk-free” U.S. government securities? Well, that’s as distant as the 45-cent price tag for a dozen eggs in 1974. Today’s Treasury yields at comparable maturities are between roughly 2.5% to 3.0%.

Read more at Advisor Perspectives.

Photo: Iohit V

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