Back to the De-Risking File

If you recall, shortly after Donald Trump got elected, I published a piece on what heightened uncertainty means (or should mean) for risk premiums across all asset classes — in that they should be higher across the board. That included bond duration risk even though our Strategizer model is predicting solid potential bond returns for the year ahead after a spike in the 10-year T-note yield to 4.65% (up a resounding +105 basis points from the nearby September lows and back to where they were in April 2024). We did an asset mix shift in our model portfolio at the time and majorly de-risked across bonds and stocks and shifted to cash, which generates a completely safe 4.5% yield. While I didn’t pound the table and put the report on the shelf, it was published for all to see, was never retracted, with only a “tip of the hat” to some of Trump’s economic choices for cabinet, particularly Scott Bessent as Treasury Secretary.

It’s time to revive the thesis more vociferously.

Warren Buffett has built up a 30% cash hoard for a reason.