60–40 Bonds-Stocks Is Dead

Best investing insights from the last week of September 2023

Here is a summary of the best investing insights and trends from the previous week. If you investing either passively or actively in the stock market, here are some very important things you should know.

First thing you should know…

The 60% bonds, 40% stocks trade is over. Bonds do not inversely correlate with stocks anymore. In simple language, this means when stocks go up, bonds go up too. When stocks go down, bonds go down too.

In the past, stocks and bonds have an inverse relationship such that when one goes up, the other is down. Those days are behind us now. We will discuss the implication of that later.

This means that you can no longer use bonds to balance or protect your stock investments. Now, this is real-life trends from the last 2 years. Your financial advisor may be telling you that you need to balance stocks with bonds (and that bonds are safe). Not giving you financial advice, but just telling you that narrative is obsolete.

Here is my discourse on why bonds are no longer safe havens

You could still invest in bonds if you like, my job is just to show you the risks associated with that.

So, what do you replace bonds with? Well, I think it is the USD (as long as it remains the global reserve). The inverse relationship of stocks (and bonds) now is with the USD.

Here is my full explanation on that

Next up is the US government shutdown…

It won’t be the first or second. As long as the shutdown doesn’t continue for months, things shouldn’t be bad. It’s just the usual Washington drama. What is more concerning is the strikes.

After 5 months of the strike, Hollywood writers are back to work with a 5% pay rise along with some concessions on the use of AI and the like. Personally, I don’t like the sound of that. For some reason, it doesn’t sound like a win. That is why you should never work for money.

My focus is now more on the UAW strikes (that is, the auto workers). The strikes continued based on the announcement of the union leader on Friday.

Here is a breakdown of the auto strike saga

The problem with the strikes is the wealth inequality problem brewing.

Next up…

There is an undersupply in the oil market, even though the USA is at peak production. The strategic reserve has been drained to an extent. And oil prices are heading towards $100.

Here is the implication of higher oil prices

The iPhone 15 is also making the news for a number of reasons.

Here is why I think it might not be the massive jackpot this time for Apple

Finally, 3 core investing insights

1. 5 investing principles to stay ahead of stock market noise
2. Why smart investors stay invested in US equities for the long term
3. Avoiding investing blindspots

If you find one or more of these educative, share with a friend