Current Capital Market Volatility
Members of the NYC Mastermind Group received an encapsulated description of the current state of volatility in the current Capital Market. Jim Moore, principal and founder of Kensington Capital Advisors, was on hand as this month’s guest speaker. He provided the group with a comprehensive overview of volatility in the fixed income market, which has increased significantly over the first half of 2018.
Here are some of the key takeaways of his presentation:
• Cap prices have increased significantly over the last several months.
• The primary driver has been an increase in rates across the yield curve.
• Caps with lower rates (strikes) will increase the most.
• Higher cap rates will experience a higher percentage increase.
• Increases in volatility will drive higher cap rates more than any changes in rates.