Podcast is Live!

A couple weeks ago that I was interviewed for a local podcast, which focuses on local business owners and professional leaders. The podcast is now live!

Please forgive the first three minutes’ audio quality and informality. Quality improves at about 3:20. In the first few minutes we were just casually shooting the breeze as audio was getting set up, but then my gracious hosts decided to keep it in the podcast because it was interesting background.

Topics covered include risks facing nearly-/recently-retired folks and how those risks can be addressed, independent advisors vs. commissioned brokers, fees, active vs. passive, types of bonds to consider, stocks vs. bonds, potential returns over next 10 years, bitcoin, Tesla, Apple, steps you can take right now, when should someone hire a professional advisor, how to determine your investment strategy, etc…

There is some great stuff in here. I hope you find it interesting and helpful and share!

Thanks again to Variant Productions for the time and opportunity!

podcast link

 

Bonds, Part 2: Corporate Debt Fundamentals Worsening

A couple days ago I emailed a commentary about how I’m managing clients’ bond sleeves. As a brief refresher, I’m avoiding high yield / junk bonds and over-weighting Treasury bonds relative to investment-grade corporate bonds. That commentary was very high level focused on the historical performance of each segment during times of economic and market stress. Today, I’m going to get a little deeper into the weeds.

Executive Summary:

  1. The credit quality of the investment-grade bond market is deteriorating
  2. Corporations have been piling on debt so leverage is at all-time highs
  3. High yield bond prices beginning to roll over

Continue reading “Bonds, Part 2: Corporate Debt Fundamentals Worsening”

How I’m Managing Bond Investments At This Stage in the Cycle

As discussed at length, I have significant concerns about U.S. stock market valuations and what that may portend for the next bear market. After all, the most reliable valuation metrics are indicating the U.S. stock market is more expensive than ever before (including 1929 and 2000).

Although valuations aren’t useful for short-term trading, valuations do provide insight into the potential severity of the next downturn. So whether the next bear market has already kicked off with the January 26th peak or starts 12 months from now, the key to understand is it will likely be commensurate with the extremity of current valuations (i.e. severe).

A couple proactive approaches I’ve offered for consideration to preserve financial independence is either (1) under-weight U.S. stocks in favor of other asset classes, including bonds, and/or (2) incorporate “put options” to insulate portfolios from a significant stock market decline. Today, I’ll focus on what I’m doing within the bond sleeve of portfolios I manage. Continue reading “How I’m Managing Bond Investments At This Stage in the Cycle”