Lance Roberts

Bonds In Your Portfolio: Why Ditching Them Is The Wrong Move Last October, CNBC ran a story on the rise of the “60/20/20” portfolio. The pitch was simple. A positive stock bond correlation has broken diversification, so investors should take half of the bond allocation and move it into gold and Bitcoin. Several strategists lined up to endorse it. Let's see how that turned out. open.substack.com/pub/lancerober…

Leverage, Swaps & Forced Selling: Lessons From The Momentum Crash $NBIS $CRWV $SKHY $CORZ $APLD $BE $MTUM $SOXX Please ❤️like, bookmark🔖, and 🔁share with fellow investors The recent momentum crash wasn't just about AI and semiconductor stocks falling—it was a textbook lesson in how leverage can amplify both gains and losses. Much of the dramatic selloff was triggered by the collapse of the highly leveraged Situational Awareness Fund. The fund, run by a 24-year-old, reportedly grew from roughly $250 million to nearly $40 billion by using equity swaps to gain approximately 4x leveraged exposure to momentum stocks. As long as those stocks kept rising, returns were spectacular. But once momentum reversed, leverage quickly became the fund's biggest weakness. The most important lesson is that leverage changes who controls your investments. Whether you're using margin, swaps, or leveraged ETFs, there comes a point when your lender or counterparty—not you—decides it's time to sell. When losses become too large, positions are forcibly liquidated to protect the lender's capital, regardless of valuations or long-term fundamentals. That's exactly what happened. I noticed unusually large declines in several momentum stocks before the news broke and suspected a major liquidation was underway because the price action simply didn't match the fundamentals. Later, reports confirmed that the hedge fund had indeed been forced to unwind its positions. Once the liquidation was complete, the selling pressure disappeared. Buyers quickly stepped in, helping many of the same AI and semiconductor stocks stage a powerful rebound over the following two trading sessions. That rebound, however, doesn't necessarily mean the correction is over. It simply shows how markets often recover once forced sellers are out of the way. This lesson extends well beyond hedge funds. Retail investors embraced leveraged ETFs earlier this summer, increasing exposure to the same momentum trade. As markets rolled over, many of those positions were also unwound, adding fuel to the decline. So, the takeaway is simple: leverage is a powerful tool, but it comes with a hidden cost. It can magnify returns during bull markets, but it also removes your ability to decide when to exit during downturns. Understanding how leverage, swaps, and forced liquidations work can help investors recognize that not every sharp selloff is driven by deteriorating fundamentals. Sometimes, it's simply the mechanics of leverage playing out—and those who avoid excessive leverage are often in the best position to take advantage of the opportunities that follow. 📺Full episode: youtube.com/watch?v=XLZMmL… Catch me daily on The Real Investment Show: @TheRealInvestmentShow" target="_blank" rel="nofollow noopener">youtube.com/@TheRealInvest…

8-3-26 The AI Capex Bill Comes Due x.com/i/broadcasts/1…

In today's article, we took a look at @CNBC, which promoted the idea of a 60/20/20 portfolio (60% equities/20% gold/20% bitcoin). As is always the case, whenever the media starts promoting something, you are generally near the peak of whatever is surging. This is what happened since. realinvestmentadvice.com/resources/blog…

Earnings have been stellar this year, but the next two quarters are likely "peak earnings."

This is really more amazing than you think. Normally, we come into earnings season with estimates having been lowered, allowing for a high beat rate. In Q2, estimates were at highs and rising, and the proportion of S&P 500 companies beating earnings estimates set a new record. h/t @SoberLook

While the market had a furious comeback last week on short-covering, the S&P 500 fell 0.1% in July, well below its historical average of 0.8%. Statistically, this lowers the bar for year-end returns according to @CarsonResearch . Since 1950, when both June and July have been weak, the rest of the year has often had a hard time delivering much upside. h/t @ISABELNET_SA

@ISABELNET_SA Thank you. Have a great week.

🇺🇸 Sentiment The Greed and Fear Index climbed to 77.29 after earnings from large-cap stocks, with investors still firmly bullish and showing little sign of worry 👉 isabelnet.com/?s=sentiment h/t @LanceRoberts $spx #spx #stocks #equity

Watch the full show here: youtube.com/c/TheRealInves… x.com/LanceRoberts linkedin.com/in/realinvestm… facebook.com/RealInvestment…

Will AI Cap-ex investments generate enough profits to justify the cost? I will examine why Wall Street is becoming more focused on return on investment rather than rewarding companies for spending more on AI, on #TheRealInvestmentShow, streaming live starting at 6am CDT on YouTube, Meta, LinkedIn, & X. (Links are in the comments)

Daily Market Trading Update: August 3, 2026 open.substack.com/pub/lancerober…

@UnclePennyBagz3 @adamtaggart Now that is a true statement....what seems like a MAJOR problem, may just be amplified noise.

I did catch your take on that in the episode last week, which was very positive and I love to see that statistic. I guess what also needs to be understood is not just "the noise" around data, but the "noise level". Social media has made both sides of the K louder so it "feels" like a more stark divide. Political extremes only heighten this feeling of social unrest as dems vs reps has become socialsts vs dems vs reps vs maga. The "submarine" of social disparity can probably go a hell of alot lower before "implosion" and perhaps, to your data, it matters less and less if the bottom of the K is losing more numbers making that social unrest less of a threat.

Think of the US economy as a submarine, with bond prices as depth & bond yields as pressure The deeper bond prices drop, the lower GDP growth becomes And just as the lower a sub sinks, the higher the surrounding sea pressure becomes -- so does the pressure on the economy rise as bond yields increase In both cases, there's a point where the pressure gets so high that things implode With a submarine that = hull breach & dead sailors With the economy that = recession, mass layoffs & credit crisis The key questions to ask now with yields rising fast: Where is the implosion point? and How close to it are we?

@UnclePennyBagz3 @adamtaggart That is only partly true. The lower class is being reduced as the middle and upper class improves. This greatly reduces the risk of a civil uprising. realinvestmentadvice.com/resources/blog…

You are both right and both wrong . The top half of the K will continuing growing with productive hyperscaler debt pushing gdp up and pushing asset prices higher for those that own them to @LanceRoberts 's point. To @adamtaggart 's point, the rising yields will jack up the bottom end of the K for those riddled with debt and have no real assets . The real question isn't about debts, yields, or economic woes, its when is the civil uprising start? On your next weekly market recap, can you guys graph pitch fork and torch sales?

@metzgrer73336 @adamtaggart I am writing an whole piece on @adamtaggart submarine analog. Will have it posted likely by next week.

@LanceRoberts @adamtaggart I read your reply again..."the outcome of the debt which is disinflationary" is the key here, I get what your saying and it makes sense.

@metzgrer73336 @adamtaggart Now, THAT is funny. 🤣🤣🤣

@LanceRoberts @adamtaggart If I were I would definetly be rated as junk bond status.

@metzgrer73336 @adamtaggart You are not a reserve currency issuer or a government. Two very different things.

@LanceRoberts @adamtaggart My rates are certainly impacted by the quantity of my debt :-) In 2022 the UK 30 yr rose by roughly 1.5 points within a few days when investors concluded their gov't would have to issue more debt Point taken on Japan that is a headscratcher, i could be wrong.

@adamtaggart @HerchLL That was a mortgage issue, not a Treasury Bond market issue. Two VERY different things....and also pay attention to what bond yields did during the GFC.

@HerchLL @LanceRoberts What would you call the GFC?

@metzgrer73336 @adamtaggart Rates aren't driven by the quantity of debt, but the outcome of the debt which is disinflationary. Why Japan has been plagued with low rates for 30 years.

@LanceRoberts @adamtaggart Not sure I agree with the premise that rates will not go higher if we continue to be fiscally irresponsible. I think due to being the worlds reserve currency we have deep treasury markets but at some point this wears thin.

@jqhary @adamtaggart You are right on most counts, however, I just wrote a piece in reference to your last point on "safety." realinvestmentadvice.com/resources/blog…

1/ One of the biggest structural changes in macro since 2022 has been the U.S. Treasury market. Before 2022, geopolitical shocks or market stress typically triggered a classic flight to safety: capital flowed into Treasuries, yields fell, and gold often moved inversely with real yields. 2/ Since 2022, that relationship has weakened. During episodes such as the Russia-Ukraine war, tariff tensions, and Middle East conflict, long-dated Treasury yields have often remained elevated—or even risen—instead of falling as they historically would have. 3/ Markets are asking who will finance persistent U.S. deficits and an ever-growing stock of Treasury issuance. 4/ Foreign demand hasn’t disappeared, but the rapid expansion in foreign Treasury holdings that characterized previous decades has slowed. 5/ Meanwhile, interest costs on the national debt have become a major fiscal consideration, reinforcing concerns about long-term supply. 6/ Inflation is no longer the dominant explanation for long-end yields. The 2022 inflation surge was heavily influenced by supply shocks and housing-related price pressures, both of which take considerable time to work through the economy. 7/ As those forces continue to fade, inflation should gradually move closer to the Fed’s target. Near-term inflation risk today is much more sensitive to energy prices than broad-based demand. 8/ The one-year breakeven inflation rate is already carrying a 2% handle, suggesting inflation expectations continue to trend lower. That gives the Fed room to begin cutting policy rates soon, allowing the Treasury to refinance debt at lower costs over time. Whether that alone is enough to restore confidence in long-duration Treasuries remains an open question. 9/ If long-end yields remain stubbornly elevated despite lower inflation and Fed cuts, policymakers could eventually face pressure to support the long end more directly, either through Treasury purchases or measures affecting the mortgage-backed securities market. TL;DR: My view is that the post-2022 Treasury market is fundamentally different. The long end is increasingly reflecting concerns over debt sustainability, deficits, and demand for Treasuries, not simply inflation. The idea that Treasuries are always the ultimate safe haven is no longer as reliable as it once was. .@LanceRoberts

@Spergburger @MarkHubbard33 Thank you, so much. Have a great week.

@LanceRoberts @MarkHubbard33 I value & thank you for your work you produce in the mornings & weekends with TM. I’m also glad to hear if good health news of you & your family.

#FinX If I'm ever feeling too up, or too happy about life and my (currently beleaguered) portfolio, I just read Jesse Felder's Sunday market doomsday eletter to get that comforting depressed feeling with an ever present tinge of foreboding again. I do wonder what he actually invests in: I'd say metals and commodities: [looks at own portfolio ... yeah, that's not working out great either.] Then to get back to 'normal' and reality I go grab a third cup of coffee and I read @LanceRoberts Sunday (New Zealand time, Saturday in US) Substack which also arrives in my intray ... Follow Lance's X account: huge amount of timely *competent* information on your investing (including your investing behaviour) and on markets day by day (but the weekend substack is great for leads into the next investing week). Also his Youtube channel and his weekly talks on @thoughtfulmoney with @adamtaggart lanceroberts.substack.com/p/bull-bear-re…