Time To Ditch Bonds? Barron's -- January 10, 2025

Locator: 44663BONDS.

The headline barely supports the story. It's almost as if the writer simply spoke to a bunch of folks and suggested an investment buffet. 

Link here.

A surge in bond yields on Friday highlighted the volatility that has characterized fixed income in recent years and has caused some investors to question the stability of the popular 60/40 asset mix.

Long-term bond yields soared on Friday after a strong jobs report dampened expectations of rate cuts by the Federal Reserve. The yield on the 10-year Treasury note rose to 4.74% on Friday morning, the highest level in more than a year.

Yields had already been notching higher in recent weeks on fears of persistent inflation. Bond yields move inversely to prices, and lower bond prices indicate more investors are selling their bonds amid fears that inflation will eat into their real returns and strong economic growth will prevent the need for rate cuts, among other concerns.

Since the beginning of 2022, volatility has increased in fixed income, says Jordan Rizzuto, managing partner at GammaRoad Capital Partners, an investment research firm. What’s more, bonds have been more correlated with stocks lately than they have been during the prior 25 years or so, he notes.

Blah, blah, blah.

And then this:

“Contrary to conventional wisdom, bonds add little to nothing for retirees,” wrote researchers from Emory University, the University of Arizona, and the University of Missouri.

In lieu of a balanced stock and bond portfolio, the researchers found investors were less likely to exhaust their savings with an allocation of 33% domestic stocks and 67% international stocks.

Retirement expert Wade Pfau says income-oriented retirees could successfully swap annuities for bonds in their portfolios. Rather than set a fixed allocation to annuities, it is best to back into the amount by calculating how much income you require and buying an annuity to cover it, he says.

Once you have your spending needs covered, “You don’t have to be as worried about market volatility, and the remainder can be in stocks,” says Pfau, author of the “Retirement Planning Guidebook” and professor of practice at The American College of Financial Services.

On the other hand, Vanguard has suggested a higher allocation to bonds for investors who are comfortable with an active approach that responds to changing market conditions. A 40% stock, 60% bond portfolio might be warranted under today’s conditions, when higher interest rates have led to higher expected returns for fixed income, the firm said in a recent note. On top of that, high starting stock valuations imply that investors may not get adequately rewarded for holding equities.

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The Book Page

The Greeks: A Global History, Roderick Beaton, c. 2021.

Chapter 8:  Becoming Christian, 337 - 630.

Page 255.

At the time of Constantine's deathbed baptism in 337 ....

In Egypt, a villager by the name of Pachomius, who had converted to Christianity while serving in the Roman legions, seems to have been one of the first to establish a system of communal living for segregated groups of men and women, under strict religious rules and keeping their distance form towns and cities. By the time that Pachomius died in 346, nine of these "monasteries," as they came to be known, were in existence in Egypt. Those who submitted to the rule of a monastery were known as "monks."

The Greek word monanchos literally means "one all alone," a description that better fits the hermits and solitary ascetics than members of the communities founded by Pacohmius and others. A hundred years later, there may have been as many a fifteen thousand monks living in Egypt, including at least four hundred nuns. 

Many of those would have spoken Coptic, a form of ancient Egyptian that was also gaining ground as a written language among Christians. But the lives of the founders were written in Greek and widely read throughout the east empire. It was to the monks and hermits of their own localities that ordinary people looked for an example of how to love as Christians, as much as to distant emperors laying down the law in Constantinople.