Fixed Income In A Speculative Era
It’s debatable on whether we are in a bubble. But probably most investors would agree that we are now in a speculative era, given extremely high stock valuation by many well known historical standards and extremely low bond yields.
In this newsletter, we look at the role of fixed income in such an era. Specifically, we will look at our total return bond portfolios and see how they help to navigate through this environment.
Stocks vs. bonds since 2001
Though it’s easier to have an impression that stocks (well, at least US stocks) have done a fantastic job for the past many many years, in reality they have lagged behind our bond portfolio Schwab Total Return Bond for the past 15 years (since 2015) or longer:
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