During the first half of the year, I repeatedly suggested that most folks lighten up on equities and hold 25% to 50% in cash. That included five consecutive columns on MarketWatch between February and May which discussed different reasons for my thinking. I took quite the verbal thrashing from some commentators that I dare suggest the cyclical bull market was approaching risky levels.
With a discussion of the bond bear market comes many moving parts. David seeks to explain the concepts while utilizing the analogy of cutting an apple. An apple can be cut in many different ways, and each method uncovers a new way of looking at the apple and its pieces – in this case, interest rates. There are two main interest components that are discussed in this episode of Money For the Rest of Us: inflation expectations and real rates (i.e. your return after inflation.)