After 42 years in and around the financial arena, I believe my late-2021 call on gold and bonds was the best of my career.
For several years going forward, I believed gold would meaningfully outperform general equities and Treasury Bonds, while those bonds would actually generate a negative total return.
From January 1, 2022, to today:
Gold: up 122%
S&P 500: up 75%, including reinvested dividends
10-year Treasury bond: down 18% (including interest payments)
From a client of our financial planning group:
In financial services, some say you are only as good as your last call; others ask, “What can you do for me now?”
Because this view helped produce my greatest one- and five-year personal investment success, I am strongly tempted to quit while I am ahead.
Yet our planning group’s clients remain deeply concerned about income, so I will look into my crystal ball one more time, knowing this can eventually lead to eating lots of broken glass.
I said at the time that, given the reckless deficit and debt spending, a 5%, 10-year Treasury bond was a matter of when, not if. With the yield now at 4.7%, the energy crisis showing no signs of ending soon, and foreign ownership of Treasuries declining sharply, I believe that target is all but certain.
If the Fed does not raise rates next week, I believe my target is more likely to be reached than if it does.
Personally, I continue to use only one-year T-bills and view them as especially attractive for now, given everything else taking place.
I was strongly opposed to private credit and private equity, and I now view them as more troubling than ever.
TOUT-TV (CNBC) Talking Heads on Interest Rates From Then To Now!
