Many Happy Returns Stocks vs. Bonds: Who Wins the Next Decade?
18 snips
Sep 3, 2025 Bonds are making a surprising comeback, transforming portfolios once dominated by stocks. With high stock valuations, experts suggest a shift towards a 30-70 bond-heavy allocation. The podcast dives into the psychological effects of market volatility, rethinking traditional 'buy the dip' strategies. It also tackles pressing questions about the future of zero interest rates and the complex factors shaping Europe’s economic landscape. This engaging discussion encourages a fresh perspective on investment strategies amidst changing financial realities.
AI Snips
Chapters
Transcript
Episode notes
Bonds Improve Risk-Adjusted Returns Now
- Vanguard's VCMM forecasts similar absolute returns for a 60-40 and a 30-70 portfolio over the next decade.
- The 30-70 mix offers much lower volatility and drawdown, improving risk-adjusted returns.
Align Risk To Your True Tolerance
- Match your portfolio risk to your true tolerance rather than historical defaults.
- Dial back equity risk if you cannot emotionally or financially withstand deep drawdowns now.
Inflation Is Bond Enemy Number One
- Inflation is the main threat to bond returns because it erodes fixed payments and forces central banks to raise rates.
- High sustained inflation would eventually punish equities too, but bonds suffer earlier and harder.