I’ve recently been thinking about the implications of “low-risk safe haven” bond market and bond fund investors losing a lot of money in those investments in the years to come and the bond market (bonds and bond funds/ETFs) losing its “low-risk safe haven” status resulting in substantial increases in interest rates, low confidence in abilities of the U.S. federal government being able to service its debts (perhaps even getting to the point similar to Greece or Italy), high inflation, future hesitancy of investors to buy bonds (government, municipal, and corporate) and bond funds/ETFs after years of losses resulting in still higher interest rates to entice new buyers, and a deteriorating economy and government/corporate finances due to the combination of these factors.

These are some of the dark clouds I’m seeing on the horizon. Lots of things to ponder and position for – especially since the perceived, historical, low-risk investments might actually become high-risk investments in the years to come. Perhaps the best longer term investment strategy will be investments which track longer term interest rates (e.g., shorting the longer-term bond market).

For perspective, take a look at the 10-year treasury rates (prices move in the opposite direction of yields) which have been falling for 40 years. The last time they went up consistently was during the 1960s and 1970s.

The bottom line is that bond prices (and bond funds for that matter) are extremely high right now (and yields extremely low) which means significant losses could be experienced by bond market and bond fund investors in the years to come.

For your reference, here’s an interesting article on debts and deficits: https://finance.yahoo.com/news/national-debt-affects-investments-212804085.html

Here’s another interesting article on bond market risk: https://finance.yahoo.com/news/why-financial-advisors-watch-bond-184731799.html

And here’s another interesting article on inflation: https://www.ally.com/do-it-right/trends/weekly-viewpoint-january-22-2021-inflation-affect-on-portfolio/

You can learn about all of my investing techniques via my “Invest Like a Pro in 10 Minutes a Day!” series of 4 books where you can learn the “end to end” process to investing and gain key investing insights and skills (https://brighterdayslifecoaching.com/published-books…/).

Also, you can read all about my stock market activities here: https://brighterdayslifecoaching.com/stock-market-activities/

I wish you much success in creating a brighter financial future for yourself, your loved ones, and those who follow!

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