Now Is a Great Time to Be a Bond Investor

Episode #349 | February 20, 2024

Episode #349 | February 20, 2024

Now Is a Great Time to Be a Bond Investor

In This Episode

On this week's Stansberry Investor Hour, Dan and Corey welcome fellow Stansberry Research analyst Mike DiBiase back to the show. Mike is the editor of Stansberry's Credit Opportunities and senior analyst on Stansberry's Investment Advisory. He joins the podcast to talk about a potential credit crisis in 2024 and all things corporate bonds.

Dan and Corey kick things off by discussing Lyft shares soaring after a numeric typo in the company's earnings report, market volatility after the latest consumer price index release, the possibility of "Volmageddon" 2.0, and the harms of passive investing. When speaking about all the trouble brewing in the markets today, Dan notes, "Risks don't register until they happen."

Next, Mike joins the conversation and shares his concerns about the bond market. Specifically, he believes that we're in the early stages of the next credit crisis. He goes into detail about why we're overdue for such an event, which specific indicators are signaling turbulent times ahead for the market, and whether the Federal Reserve could do anything to lessen the inevitable damage. But as he clarifies...

It's not the type of thing that makes big headlines, so a lot of people that don't follow these [indicators] closely are not going to be that aware of them.

Mike also analyzes the stock market and how it paints a bleak picture. As he explains, corporate earnings declined in 2023 even though many companies had a fantastic year and posted incredible numbers. And despite this "earnings recession," stocks are still trading at all-time highs...

With all these negative signs I'm seeing, recession indicators are all saying the same thing: There's going to be a recession. It has never not happened when these indicators are going off... You have earnings that are contracting and yet the market is hitting all-time highs. And it was already expensive at the start of 2023. How much longer can this disconnect go on?

Then, Mike covers why he believes the struggling U.S. consumer is going to usher in the next credit crisis, how today's market is so similar to 2008's, and why corporate bonds still make for good investments.

Lastly, Mike discusses how this new era of high interest rates has irreversibly altered the investing landscape that people have grown accustomed to over the past 40 years. He explains that stocks were the favored investment when the Fed was keeping rates near zero, but bonds are back on a more equal playing field thanks to high interest rates...

Times have changed. It's good to be a bond investor now. And I don't think we're ever going to go back to that world of zero-percent interest rates again... Yes, interest rates may not be back to the teen and 20% that they were in the early '80s and late '70s, but they're not going back to zero either. That's a big change that most people haven't fully grasped yet.