Tag: bonds

Markets remain strong but increasingly concentrated in a few tech giants. This letter discusses diversification strategies, AI-driven trends, risks of index investing, and macroeconomic factors shaping 2026.

The national debt today is over $36 trillion, representing over 100% of GDP. The Congressional Budget Office (CBO) projects that the debt will exceed $52 trillion by 2035. And, if history repeats, actual numbers in 2035 will exceed estimates.

For much of the past decade, fixed income felt like an afterthought. Ultra-low interest rates meant bonds offered little income and even less value. Then came 2022—when bond prices finally cracked under the weight of distorted valuations. Even now, many investors in broad bond indexes are still waiting to break even.

In my February 7, 2025 post, Bonds Have a Place Again, I reflected on interest rates some five years after the peak of the Bond Bubble—when interest rates reached a low never seen in human history—and two years after bond prices finally crashed in 2022. I had summarized our approach to fixed income going forward: […]

We have experienced a benign 2025 so far despite a correction in the stock market and higher volatility. Modest stock allocations and gains in insurance stocks (our single largest industry exposure), gold, and newer fixed income buys have buoyed account values.

In his 2011 book Debt: The First 500 Years, anthropologist David Graeber lays out the historical concept of debt, starting with the Sumer, the earliest known civilization, located in historical Mesopotamia around 3500 BCE.

Nearly five years ago, bond yields dropped to levels never seen in the thousands of years humans have been lending to one another. The shortest maturity fixed-income securities yielded virtually zero in the U.S. and less than zero in Europe and Japan.

2024 was another good year for stocks overall thanks to continued strength in just a handful of the largest technology and internet companies. The famed “Magnificent Seven” once again comprised the bulk of stocks’ overall returns.

Returns this year have been kinder than I would have expected given our rather conservative positioning. Stock allocations have been lower than usual, with little in information technology and internet-related stocks, two areas that have accounted for the lion’s share of the stock market’s returns in recent years.

Capital markets in 2023 showed investors’ resilience—or was it complacency? Clearer was yet another lesson on the dangers in following forecasts, especially those of policymakers, PhDs, and Wall Street strategists. The Fed’s interest rate hikes and tough inflation talk didn’t cause an “inevitable” 2023 recession after all.

Neil Rose explains why anyone can manage cash like Warren Buffett. He explains how Treasury bills work and why they are a no-brainer for one’s cash reserves.

Neil Rose highlights the risks and failures of banks.