Stocks aren't Bonds; Bonds aren't Stocks

Well, yeah. Thanks for stating the obvious, Rob.

The point is that bonds are getting pounded for a very specific reason: inflation has remained persistently high and the Fed is dragging its feet about fixing it. While the current bout of inflation is complicated because of Covid, don't forget the Federal Reserve has been trying to increase inflation since 2009. They are a major factor in today's high inflation and refuse to move aggressively to rectify it.

But why are stocks hanging in there while bonds take a beating? Simple, the economy is still growing and the Fed is dragging their feet on inflation. When interest rates get high enough to change borrowing behavior in housing and business, then stocks will care. There are some early signs this is happening in housing, which may be a harbinger for the other cyclical parts of the economy.

In the meantime, as I like to tell our bullish clients, the market is giving you a graceful opportunity to de-risk your portfolio. Are you?

Call us if you want to discuss your situation.

Robert Lloyd, CFA®

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.