On a recent episode of the Retire SMART Podcast titled Bond Vigilantes, the host took aim at one of the most reflexively defended pieces of retirement advice: park older clients in a laddered bond portfolio and call it safe. “A lot of advisors have still been just putting their…
der clients in particular, oh, we’re gonna put you safe and we’re gonna put you in this ladder bond portfolio. And that portfolio has lost 15 to 18% over the last 5 years
Yeah. And so it’s been disastrous.” If you are retired or close to it, that is the line that matters. The bond sleeve was supposed to be the part of your portfolio you did not have to worry about.
According to the host, it quietly cost a lot of retirees real money. Quick Read – Laddered bond portfolios have lost 15-18% over five years as bonds issued near historic lows in 2020-2021 fell in value when yields rose to 4.5% for 10-year Treasuries, while inflation near 3.8% eroded purchasing power even further. – Fed Chair Kevin Warsh’s choice between alternative inflation measures like Truflation (currently showing 2.07% inflation) versus traditional PCE benchmarks will determine whether he hikes, holds, or cuts rates, directly impacting bond valuations. – Why the “safe” sleeve bled The host’s figure is his, not ours, but the mechanics line up. A bond ladder built in 2020 and 2021 locked in coupons near generational lows.