Warning!

Once again I will take this opportunity to warn those who have 100% stock portfolios especially S&P 500 index or Total Market index. 

Stocks continue to fly ever higher with valuations moving closer and closer to the sun and yet there is an undertow with long term bonds whether investment grade corporate or U.S. Treasury 30 year maturity pulling harder and harder the rug out from under the feet of stocks.

Bond yields, especially long term are spiking higher and higher improving their compounding effect so much so, outperforming stocks over the next 10 years has become IMHO the most likely event.

This is especially true for dollar cost averaging starting without a lump sum.  Pure 100% dollar cost averaging exampled by Vanguard’s Long-Term Investment-Grade Fund Investor Shares current yield at 5.73% (as of 8-4-2026) as opposed to Vanguard’s 500 Index Fund with its tiny dividend yield at 1.02% (as of 8-4-2026)!  The bond yield is now (5.73 – 1.02) ÷ 1.02 X 100 = 462% (rounded) greater yield.  This all stock buyer is in a most awkward position of not just expecting higher stock prices (Shiller PE at 41.51) but demanding as the dividend yield has no chance (despite dividend increases) of outperforming current bond interest income.

Retirees who have been yield starved for far more years than we would ever wish to count we’ll have to wait until the screams of high rates is not just with the Legacy Media, but the social media as well.  Once that occurs – I have no idea when – buying long term investment quality bonds will make sense placing a positive outcome in you’re favor.

Till Next Time!