Past is Prologue
By LaRue Gibson on February 21, 2024
William Shakespeare famously quipped “What Is Past Is Prologue.” Success in most endeavors, including investment markets, requires an understanding of historical antecedents and learning from their implications for the future. Many know the phrase “Those who fail to learn from history are destined to repeat it.” We prefer to apply what has come before to improve the probability of success and reduce the chances of failure. “This time is different” remain the four most dangerous words in investing. History, through statistical data, may improve opportunity as well as help to avoid disaster.
If the past were always prologue, what fun would that be? Below, we illustrate a chart that defied the Past Is Prologue mantra. The current Federal Reserve interest rate pause did not reward investors in long duration fixed income as history predicted:
Source: Strategas Securities LLC (2024.02.07)
History indicated that long duration bonds would increase in value 6-months after a Fed pause. That did not happen. We can speculate that expectations of heavy treasury issuance to finance the large budget deficits or fears that the 2024 fiscal spending wave might reignite inflation may have given long bond investors pause about lengthening duration. Regardless, we acknowledge the rare result this unprecedented loss presents.
LRG Wealth Advisors is a group comprised of investment professionals registered with Hightower Advisors, LLC, an SEC registered investment adviser. Some investment professionals may also be registered with Hightower Securities, LLC (member FINRA and SIPC). Advisory services are offered through Hightower Advisors, LLC. Securities are offered through Hightower Securities, LLC.
This is not an offer to buy or sell securities, nor should anything contained herein be construed as a recommendation or advice of any kind. Consult with an appropriately credentialed professional before making any financial, investment, tax or legal decision. No investment process is free of risk, and there is no guarantee that any investment process or investment opportunities will be profitable or suitable for all investors. Past performance is neither indicative nor a guarantee of future results. You cannot invest directly in an index.
These materials were created for informational purposes only; the opinions and positions stated are those of the author(s) and are not necessarily the official opinion or position of Hightower Advisors, LLC or its affiliates (“Hightower”). Any examples used are for illustrative purposes only and based on generic assumptions. All data or other information referenced is from sources believed to be reliable but not independently verified. Information provided is as of the date referenced and is subject to change without notice. Hightower assumes no liability for any action made or taken in reliance on or relating in any way to this information. Hightower makes no representations or warranties, express or implied, as to the accuracy or completeness of the information, for statements or errors or omissions, or results obtained from the use of this information. References to any person, organization, or the inclusion of external hyperlinks does not constitute endorsement (or guarantee of accuracy or safety) by Hightower of any such person, organization or linked website or the information, products or services contained therein.
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