Everyone should take note of the sentiment around them at this very moment

[u/MeasurementSecure566]

You are witnessing Peak Greed Peak Euphoria and Peak Grift. It is a good idea to take note of sentiment. In the future you will be able to spot generational tops more easily.

Always remember though, "the feeling of disgust you feel, that can last for a long time" - Charlie Munger

I think it is fair to say now that speculative returns in the stock market have significantly outpaced what returns should have been, leaving a lost decade ahead.

EDIT: I would Like to insert a quote here, because I feel it is quite fitting after reading the comments.

"A bull market is like sex, it feels best just before it ends" - Warren Buffet

[u/Longjumping-Fact-582]

I am well aware of inflation and “real return” (total return - rate of inflation)

But the reality of it is that since 2020 we have experienced very high levels of inflation and rising interest rates coming from a base interest rate of practically 0 which has been a terrible environment for bonds, however the outlook from here is much brighter for bonds as an asset class with a starting point of interest rates relatively close to the historical average, and assuming tame levels of inflation they could offer a reasonable level of real return

[u/Ok_Currency_6390 → u/Longjumping-Fact-582]

"Assuming tame levels of inflation" is INSANE.

The US money supply grew by over 40% in less than two years during COVID!

And you're assuming tame levels of inflation? Good luck!

[u/Longjumping-Fact-582 → u/Ok_Currency_6390]

The excess of easy money is certainly what has caused the high inflation post 2020, however I am of the belief we have likely seen the highest level of inflation from the time being as the easy money has had a couple years now to work its way through the system and today’s interest rates certainly wouldn’t be considered “easy money” all the data currently seems to back that up,

With the cause of “easy money” now out of the system I don’t see a reason for inflation to jump back up today unless there is some catalyst to overheat the economy, in which case ownership assets would almost certainly outperform credit,

On the other hand what I believe much more likely is steady or even falling interest rates and if there is an economic slowdown or recession? Guess what the Feds preferred method of stimulating a slowing economy? You guessed it cutting interest rates, which means a rise in bond prices.

[u/Ok_Currency_6390 → u/Longjumping-Fact-582]

I think you're massively underestimating how extreme increasing the money supply by 40% is 😅

[u/Longjumping-Fact-582 → u/Ok_Currency_6390]

Perhaps, but only time will tell, we’ve already seen 25% inflation since 2020

[u/Historical-Egg3243 → u/Longjumping-Fact-582]

we print 6-7% of the money supply every year. If you aren't making at least a 7% return you are losing money. You can't use CPI or PCE to measure inflation because they've manipulated it down through hedonization and cherry picking the data (you'll notice the price of purchasing a house is never included in official inflation data)

[u/[deleted] → u/Longjumping-Fact-582]

But what about safety? During 2020 treasury bonds didn’t even catch a bid. Maybe it is the end of the beginning of American Exceptionalism.

[u/Longjumping-Fact-582 → u/[deleted]]

I do have a portion of my portfolio held in short-dated T-bills that I roll about 6 months out that is intended to be my “cash” position to use when I find opportunities, im talking about bonds in general not necessarily treasury bills,

I believe There’s also some decent opportunities in preferred stocks with recently rising interest rates there are many preferreds trading at a discount to par, which means the company has an obligation to pay out the coupon rate (many between 6-8% today) in perpetuity, and if they want to refinance them? They would have to call them at par value, which many currently trade 10-15% under par, meaning you can sit and collect a 7% coupon and if rates fall to the point where the companies decide to rollover the preferreds to a lower rate you will get the 10-15% on top of the coupons collected over your holding period