- Equity Eats
- Posts
- Breaking Bonds 📝
Breaking Bonds 📝
Did you know that private equity investments have been around since the 1940s, but saw significant growth in the 1980s?
Equity Eats
March 12, 2024
Breaking Bonds 📝
Did you know that private equity investments have been around since the 1940s, but saw significant growth in the 1980s?
This tidbit serves as a reminder of the importance of wise investment choices, especially with so much contradictory information out there.
This edition features the following articles:
Buffet Stays Away From Bonds, Maybe You Should Too: First, we’ll discover why Warren Buffet's preference for stocks and cash over bonds might be a strategy worth considering for your own investments ❌
You Don’t Need Anything Fancy: Next, we debunk common misunderstandings about assets like commodities and REITs 🙅🏻
Industrial Stocks Setting New Highs: Finally, we’ll explore the industrial sector's impressive performance, signaling potential investment opportunities 📈
Our goal is to provide you with concise, actionable insights to navigate the market confidently.
Buffet Stays Away From Bonds, Maybe You Should Too ❌
Warren Buffet’s Berkshire held more than $360 billion in stocks and $167 billion in cash (in the form of short-term treasury bills and money markets), and just $24 billion in bonds at the end of 2023.
Even Berkshire’s fixed income portfolio is essentially cash, with almost all of it maturing in one year or less 💵
Buffet’s approach with Berkshire’s investments offers a contrast with the standard 60/40 mix of stocks and bonds.
If investors are not ready to be fully invested, they might consider following Buffet and do a barbell with stocks and cash in the form of money markets.
This will put you in a good position to pounce on any potential market selloffs 🤑
You Don’t Need Anything Fancy 🙅🏻
Here is a list of asset classes that are fine for speculation, or even investment, but that long-term savers don’t truly need.
You don’t need commodities 🛢️
The S&P 500 index fund already includes commodity producers like Exxon Mobile and Newmont.
You might have heard that commodities are a hedge against inflation, as stocks perform better than gold.
And gold has shown a flimsy relationship with the consumer price index.
You don’t need real estate investment trusts 🏢
The S&P 500 already has REITs, and all of the companies in the S&P own commercial property anyway.
You don’t need private equity 💼
The fees are high and there is no evidence that PE beats stocks.
You can skip emerging markets 🌍
Their economies don’t grow any faster than the US economy and their stock markets almost always underperform.
💰 Your New Income Generator 💰
Get an exclusive sneak peek into this secret income generator - Right In Your Pocket
1. Blow Away The Competition: Use this little-known stock market loophole to make $500-$1,000 DAILY.
2. Streamlined Trading System: This 5-step system is so easy to learn that anyone from college dropouts to 80-year-old grandmas can get started with it.
3. No Experience Or Equipment Needed: All you need is your phone or laptop, an internet connection, and 1-2 hours a day, and you’ll be ready to get going.
If you’d like to know more, sign up now for a free training that shows you exactly how you can get started.
Industrial Stocks Setting New Highs 📈
The industrial sector ETF (XLI), home to airlines, transports, and makers of heavy equipment such as Caterpillar, is up 24% since setting a multi-month low in late October.
That’s one percentage point better than the S&P 500 📊
Earnings in this “cyclical” sector is dependent on the health of the economy, and investors in the stocks are more skittish than others should signs of a slowdown appear.
The industrials ETF, currently at $120, has set 19 new highs since the start of November 🚀
The industrial sector may be sending signals about the economy that most economists are missing.
