2021 "Endgame" Portfolios

In September 2018, we introduced to the idea of undiversifiable risk and unpriceable risk. In both of these cases, the concern was that the era of falling interest rates since 1981 was coming to an end.

Without the diversifying power of bonds – by way of  forty years of falling interest rates coming to an end, or by proactively removing long bonds from our portfolios – the volatility of any investment portfolio will increase since the price other individual asset classes such as stocks have historically been more volatile. The difference between us and everyone else is we were well prepared for this to happen.