The chapter scrutinizes the fallacy of predicting interest rates based on historical trends, emphasizing their fluctuation in response to economic cycles. It discusses the irony of believing in the predictability of interest rates while recognizing the unpredictability of the stock market. Recommendations are made to build portfolios independent of interest rate predictions, with managed futures funds like DBMF proposed as a more stable approach, contrasting with the speculative nature of products like TBT.
In this episode we answer emails from Stuart, George and MyContactInfo. We discuss a follow-up on another listener's accumulation portfolio, the foibles of trying to predict future interest rates and common fallacious reasoning, levered inverse treasury bond funds and other funds that do well in rising interest rate environments, and a follow up on our target date fund rant episode (#333).
Links:
Portfolio Visualizer Analysis of UPRO and synthetic alternatives: Backtest Portfolio Asset Allocation (portfoliovisualizer.com)
TestFol Analysis with an inverse treasury bond exposure: testfol.io
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