The Bond Market Got It Wrong… This Explains Why

You are being taught to invest from a position of ‘fight or flight’ 

What type of decisions do you think a person is making as they are running for their lives? The bear is behind them and closing in. And they are having to make an investment decision…

So… is their brain thinking long-term?

No. It’s thinking, how do I not die. 

Their brain probably isn’t even thinking about the next minute. It’s focused on, right now. Stay alive. And forget about your brain thinking about tomorrow let alone ten, twenty or even thirty years from now. 

And yet, this is how you are being taught to invest. 

In this week’s video, I have the perfect image that triggers people’s brains to make very bad money choices. And this image is from a mainstream (read: kind or respected) source. Imagine how bad non-mainstream (read: pick of the month newsletters) sources are treating you. 

And the news gets worse. As soon as humans even start thinking about retirement, they often treat their money badly. 

When people realize or have already ended their active earnings years they actually become worse investors because of what they have been taught. 

People want investments that have less volatility and more certainty. That’s why the word “income” is a pavlovian word that signals to people over the age of 50 “buy here.”

And sadly because they have been taught bonds are [always] safe, they build an investment approach filled with bonds. All because they have never been trained to act in a way that is best for their money. 

This trend will only get worse as people are living longer and the noise machines are getting better at hijacking your brains. My last two images in this week’s video will clearly demonstrate this to you. 

In Your Corner,

RCPeck-Dig Signature.JPG

RC Peck, CFP

PS – I’ve have five extra things for my Money Badges this week…

(1) Never confuse good writing with a good investment
READ: still waiting for the trillions of dollars to flow into China A-shares and make us all rich. Price chart of Shanghai Stock Exchange below.

(2) Someone’s wrong.
Either stocks or bonds. My bet is bonds got it wrong. And therefore Fund Managers got it wrong. Bank of America Merrill Lynch Global Fund Manager Survey came out and the report is clear, “This is the most bullish the Fund Manager Survey is on bonds since November of 2008.” Just so you know, November 2008 marked the 50% stock market drop from its high in October 2007. Ya get it? The bond market is acting like the stock market is down 50%!!!

(3) Understanding Humans. 
“I believe no man was ever scolded out of his sins.”— William Cowper

(4) Why Jargon is expensive.
Learn anything in four steps with this technique.  

(5) Donuts, Health/Wealth and stock picks.
Give someone a box of donuts every morning (read: stock picks) that has been trained to treat their body well and they stay healthy. Give someone a box of donuts that hasn’t been trained to treat their body well and the donuts get eaten. It’s not about the donuts (stock-picks) is it? And yet that is what we have been taught. Training and this conversation is what you’ve really been looking for. And of course, there’s nothing wrong with donuts!