Gyroscopic Investing

Desert wrote:

mathjak107 wrote: hopefully the graph will not look the same with the mirror image going back up on the other side.

That's a good point.  I'm in the camp that we need higher real rates for the PP and Bogle-style portfolios to produce the level of real returns we've seen in the past.  The long-term return of 50% of the PP is directly tied to the yield curve.  The returns of equities, if you agree with the notion of an equity risk premium, are also related to real rates.  So while the short-term pain is difficult, long-term investors should be pleased to see bond yields slowly grow higher.

dragoncar wrote:

Desert wrote:

mathjak107 wrote: hopefully the graph will not look the same with the mirror image going back up on the other side.

That's a good point.  I'm in the camp that we need higher real rates for the PP and Bogle-style portfolios to produce the level of real returns we've seen in the past.  The long-term return of 50% of the PP is directly tied to the yield curve.  The returns of equities, if you agree with the notion of an equity risk premium, are also related to real rates.  So while the short-term pain is difficult, long-term investors should be pleased to see bond yields slowly grow higher.

Mortgage holders, too.