The idea of a ‘bond bubble’ has been much talked about of late. The most recent example being a piece by Jason Zweig at WSJ this weekend. In a certain respect, bubble talk is cheap. Only in retrospect can we say with certainty what market moves were detached from economic realities. However none of this helps the investor. Investors need to make their decisions in real-time, before a bubble is recognized (and popped). What investors need is an approach that recognizes the potential for all asset classes to move away from fair value. One bias-free approach is to rebalance your portfolio on a regular basis. In today’s screencast we look at investing in a rising-rate environment.
Posts mentioned in the above screencast:
Jason Zweig, “The bond market is a bubble, and the little guy is blowing it.” (WSJ)
Monthly chart of 30-year Treasury yields. (StockCharts)
“However, now is the time for investors to make sure that their asset allocation has the flexibility to handle a rising-rate environment.” (Systematic Relative Strength)
How to play rising interest rates. (WSJ)
Bubbles, rebalancing and the average investor. (The Capital Spectator)