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Central Markets by Robert Lloyd, CFA

The information contained herein has been obtained from sources believed to be reliable, but the accuracy of the  information cannot be guaranteed. All opinions and outlooks are subject to change.

  • Writer's pictureRobert Lloyd, CFA

Inflation Series Part 9 Conclusion: Inflation Rises, But Even In The 1970s, There Were Bond Rallies

Markets do not move in straight lines. They chop up and down around long-term trends as market forces, traders and news flow batter them about. During the 1970s, there were 3 major recessions that were characterized by:

1. Falling earnings

2. Falling employment

3. Falling inflation

4. Falling yields

Remember, for bonds "yields down=price up". That means that as bond market yields fall, investors collect the coupon and some capital appreciation on the underlying bond. There are opportunities here for those who follow the logic.

I'm attaching a chart of bond yields and inflation during the 1970s with the recessions marketed out. The picture is a textbook example of cyclical short-term movement around a secular long-term trend. Do you see it?

If you'd like to discuss how to manage your portfolio through this environment, please reach out to us at

Chief Investment Officer

Lloyds Intrepid Wealth Management

Lloyds Intrepid LLC is doing business as Lloyds Intrepid Wealth Management. Lloyds Intrepid LLC offers investment advisory services in the State of Texas where registered and in other jurisdictions where exempted. Registration does not imply a certain level of skill or training. Lloyds Intrepid LLC and its advisers do not provide legal, tax or accounting advice. Lloyds Intrepid LLC formulates retirement plans, investment strategies, portfolio construction and investment due diligence for clients with signed investment advisory agreements with us. The information contained herein has been obtained from sources believed to be reliable, but the accuracy of the information cannot be guaranteed. All opinions and outlooks are subject to change.

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