Notes on the Week Ahead Going Broke Slowly: The Investment Implications of Still-Rising Federal Debt
36 snips
Oct 13, 2025 David Kelly dives into the complexities of long-term investing against the backdrop of rising federal debt. He highlights the distractions investors face from political noise and offers insights on high U.S. large-cap valuations. The discussion emphasizes the significance of debt-to-GDP ratios and potential risks that could exacerbate debt growth, including recessions and policy changes. Kelly argues for diversification into alternatives and international stocks to mitigate the effects of federal debt on investment portfolios.
AI Snips
Chapters
Transcript
Episode notes
Kicker Metaphor For Investor Focus
- David Kelly compares the pressure on a visiting football place kicker to the distractions long-term investors face in 2025.
- He uses this vivid scene to illustrate the need to ignore noise and focus on fundamentals.
Focus On Long-Term Return Drivers
- David Kelly warns investors face nonstop political and market noise that can distort decision-making in 2025.
- He urges focusing on long-term return drivers and forthcoming long-term assumptions work.
Reported Deficit Masks Larger Shortfall
- The CBO reported a FY25 deficit of $1.809 trillion, but adjustments would make it $2.043 trillion or 6.7% of GDP.
- David Kelly signals FY26 deficits are likely higher after temporary accounting and policy effects.