VUSUX new NAV low 9/30/26 $7.13 (October 31, 2023 $7.44)

VUSUX per annum return 5-years -7.25%

VWESX per annum return 5-years -4.33% (NAV $6.90 vs. $6.94 October 31, 2023)

Meanwhile, checking in on the 60/40 portfolio . . . 

VTSAX per annum return 5-years +12.55%

VBTLX per annum return 5-years -0.65%  

Gold surged 64% in 2025, silver 147%, dwarfing more traditional investments

... [Gold] Bullion surged 64% in 2025, its biggest annual gain since 1979, driven by Fed rate cuts, geopolitical tensions, strong central bank buying, and rising ETF holdings. ...

Spot silver advanced 4.6% to $74.52 per ounce, after hitting an all-time high of $83.62 on Monday, while platinum jumped 4.7% at $2,150.46 per ounce, after rising to an all-time high of $2,478.50 on Monday.

Both metals recorded their best year ever, with silver leading by posting 147% annual gains, driven by its designation as a critical U.S. mineral, supply shortages and low inventories amid rising industrial and investment demand. ...

More.

 

Meanwhile in more traditional investments in 2025:

VMMSX +35.66% emerging markets fund

VTIAX +32.18% total international stock index fund

VGENX +20.62 energy fund 

VFIAX +17.83 Vanguard 500 index fund

VGHCX +17.31 healthcare fund

VTSAX +17.12% total stock market index fund

VFICX +9.53% intermediate term investment grade bond fund

VWESX +7.18% long term investment grade bond fund

VBTLX +7.15% total bond index fund admiral

VBMFX +7.03% total bond index fund investor

VFSTX +6.73% short term investment grade bond fund

VMRXX +4.23% money market fund

VGSLX +3.19 real estate fund.

Year to date spot gold is up ~54%

By comparison, Total Stock Market Index VTSAX is up 14.83% ytd through yesterday.

Total Bond Market Index VBTLX is up 6.4%.

... The [gold] rally has been driven by a cocktail of factors, including . . . a weak dollar. ... -- CNBC 

Would these people know a weak dollar if they saw it?

Trying to explain gold like this is just silly.

The Nominal Broad U.S. Dollar Index is 120.51, down 7.4% from the January all time high of 130.21.

The all time low for this index was under Obama in July 2011, at 85.46.

You remember the summer of 2011, right? 

The dollar was at its weakest, America lost its AAA rating, and precisely net zero jobs were created that August, the first time since WWII.

We have a strong dollar today, not a weak one.

 

US Treasury yields retreated 3% from their July average in the aggregate on Friday in a flight to safety

 The July average yield of the aggregate of eleven US Treasury issues was 4.2927. Friday's 3% retreat left the aggregate at 4.1636.

Yields on Bills pulled back to 4.2175 from 4.2925 in July, or 1.7%.

Yields on Notes pulled back to 3.866 from 4.042 in July, or 4.3%.

Yields on Bonds pulled back to 4.80 from 4.92 in July, or 2.4%. 

 

VFSTX is now ahead 4.45% year to date.

VFICX is now ahead 6.37% year to date.

VWESX is now ahead 4.47% year to date. 

VBTLX is now ahead 4.67% year to date. 

VTSAX is now ahead 6.26% year to date. 

As stock indexes make new all time highs, it's still a 7% world, not a 16% world

The current $SPX world, from Aug 2000 (market peak) to Dec 2023, dividends reinvested, average per annum return: 7.019% nominal.

The previous world of similar length, Apr 1977 to Aug 2000: 16.246% nominal.

Remember that no one even dates the bull market conditions of the past starting from 1977. The Reagan bull began in the summer of 1982. But even from 1977, it was a completely different, better world for investors.

The rate of nominal return per annum was 2.31 times better in that world.

Investing $100 per month in the previous world produced over $258k. Investing $100 per month in the current world has produced only $103k.

The following Vanguard mutual funds have inception dates in the year 2000. They reflect the same reality.

I show nominal average annual return since inception for each fund in 2000 through 12/31/23, per Vanguard.

Performance in red beats average SPX nominal 7.019% since 2000, but none by much. Remember that through 12/31/23 stocks generally were only recently buoyed by exceptional returns, after a down year last year. $VTSAX, the total stock market index, was up a whopping 26.01% in 2023.

VIGAX 8.21 Growth Index

VFIAX 7.62  500 Index

VTSAX 7.90  Total Stock Market Index

VEXAX 8.22  Extended Market Index

VSGIX 8.93  Small Cap Growth Index Inst.

VESIX 4.47  European Stock Index Inst.

VSMAX 9.01 Small Cap Index

VBAIX 6.70  Balanced Index Inst.

VBIAX 6.57 Balanced Index

VPKIX 3.40  Pacific Stock Index Inst.

VVIAX 7.18 Value Index

VEMIX 6.37 Emerging Markets Stock Index Inst.

VIPSX 4.49  Inflation Protected Securities

 

These are but a shadow of the former things which obtained in the previous world.

Despite US Treasury department manipulation of the yield curve last week and another Fed pause, yields still average above five in the aggregate

 We saw a much bigger surge into bonds in March, but yields persisted.

With inflation, employment, and nominal GDP all still strong, Treasury tricks are unlikely to unravel this.

Cash such as VMFXX at 4.21% ytd and total stock market such as VTSAX at 13.92% ytd continue to trounce bonds ytd. VBTLX is still down 0.39% ytd. AGG is down 3.46% ytd.

 

US Treasury yields pushed to new cycle highs last week despite another Fed interest rate pause

 Cash was about the only thing which did better week over week on Friday. Treasuries and bonds generally took a beating, as did stocks.

The UST yield curve aggregate closed up a net 1.27% week over week on 9/22, to an average of 5.0707692, the highest Friday close yet for this cycle.

Yields in the aggregate made a new high for this cycle on Thursday, for an average of 5.0915384. 

Here's the year-to-date performance for key categories using some commonly used Vanguard funds:

Treasury Market VFISX 0.66% VFITX -0.70% VUSTX -5.57%;

Investment Grade Market VFSTX 2.08% VFICX 1.32% VWESX -0.83%; 

Total Bond Market VBTLX -0.03% (+0.44% previous week);

Cash VMFXX 3.58% (3.48% previous week);

Total Stock Market VTSAX 12.95% (16.45% previous week).

 

 

Let's check in on the US Treasury yield curve and year to date performance of selected Vanguard funds

The UST yield curve aggregate closed up a net 0.68% week over week on 9/15, to an average of 5.006923, the first Friday close this cycle in the 5s.

 

As expected, fixed income isn't doing well in this rising-rate environment. Stocks have done surprisingly well this year, and even cash has beaten bonds.

 

YTD performance:

 

Treasury VFISX 0.68% VFITX -0.26% VUSTX -4.12%;

Investment Grade VFSTX 2.21% VFICX 1.73% VWESX 0.00%; 

Total Bond VBTLX 0.44%; Cash VMFXX 3.48%; Total Stock VTSAX 16.45%.

 

Other popular vehicles: 

 

$SPX 16.37%

$AGG -2.12%

$TLT -8.38%. 

 

It's been a terrible year so far for investors in US Treasury securities because of the rising rate environment, but great for stocks

UST yields rose a net 1.31% in the aggregate week over week on 7/28.

DFF rises to 5.33% after the latest FOMC rate hike.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year to date Treasury, Total Bond, Cash, and Total Stock performance using popular Vanguard funds:

VFISX +0.75% VFITX 0.90% VUSTX 1.58% VBTLX 2.05% VMFXX 2.75% lol VTSAX 19.99%!

Stocks have been the place to be, and cash has beaten even the total bond market.

Meanwhile stocks are obscenely overvalued at 169 using the latest report of GDP out Thursday:

 

The traditional 60/40 portfolio is now down only 13.76% in 2022 through November, not adjusted for inflation north of 6%

Total stock market index, VTSAX:  -14.51% through November

Total bond market index, VBTLX:  -12.64% through November

The investment cheerleaders in the US are arrayed against the Fed's rising interest rate regime and lie when they say interest rates are coming down

The yield curve recovered 98 basis points in the last week to close at 5488 on Nov 18.

Despite all the alarming volatility in US Treasuries, the curve is little changed from Oct 28 at 5487 or Oct 19 at 5486, one month ago.

The upward trend remains intact. Raising the Fed Funds rate to 3.83% has produced an overall yield curve at 4.22%.

There's plenty more to be done.

The lying rhetoric is designed to persuade the Fed to halt ("You've done enough!"), enlisting as many dupes along the way as it can to join the chorus, since easy money is the industry's goose that laid the golden egg.

But easy money is why this country is $31 trillion in debt, and why inflation is raging at an average of 8.3% in the first half of 2022.

Since March foreigners have held $300 billion less of the stuff on net through September, which is not a good sign.

But consider that there's about $2.9 trillion in US Treasury notes issued in 2020 alone paying just 0.6% on average and maybe you can understand why.

Meanwhile investors holding bonds are down 30.95% year to date (TLT) at the same time the S&P 500 is down 17.33%. A total bond index like VTSAX is down less, 16.92% year to date, which is cold comfort.

But that's not the Fed's biggest problem.

The Fed's biggest problem remains the so-called "dual mandate", to maintain stable prices AND full employment at the same time.

Our disgusting Congress foisted the latter on the Fed in 1978, which was nothing but a damned if you do, damned if you don't abdication of its own political responsibility dumped onto the appointee of the executive.

But the disgusting Congress represents the disgusting people, who want tax cuts AND infrastructure spending at the same time.

The dual mandate didn't stop Paul Volcker from doing what needed to be done to subdue inflation from 1979, but those were different times when the political tables were the reverse. Volcker was a Democrat appointee saddling a new Republican president with an unemployment rate of 9.7% by jacking up the cost of money. 

Jay Powell is a Republican appointee who will have to do the same to a Democrat president to end the current madness.

The pressure on him to relent comes from every quarter. 

We'll see if the new Republican House has the cojones to back him, which it should if it gives a fig about the future of the country.

But Jay Powell will have to prove that he has the cojones first, because the Congress is full of girly men.

He has hardly begun to fight.

Through Oct 14 the traditional 60/40 401k portfolio is down a net 21% in 2022, not counting inflation

 Bonds are supposed to perform well as the safe haven asset when stocks fall, reducing the net impact to the portfolio when equities decline.

But not this year!

Bonds have actually crashed on the long end, down even more than stocks, as stocks entered a bear market.

The bond crash is a market statement rebuking the spending those bonds have represented: Not enough return for the risk.

So far the spendthrift Congress remains tone-deaf, leaving it to the Fed to raise interest rates . . . ever so feebly.

No one in his right mind believes raising interest rates 300 basis points is going to have much impact on inflation raging at 800 basis points.

The traditional 60/40 portfolio is down 20.77% ytd

 VTSAX is down 24.89% through 9/30.

VBTLX is down 14.59% through 9/30.

And don't forget to subtract all-items inflation of 6.14% from Nov 2021 through Aug 2022!

Headlines are popping up advocating safe havens in cash and short-duration US Treasury securities, but you'll still lose in those relative to inflation, just not as much.

What a great job the Democrats have done this year! Destroying the bond market wasn't on my bingo card for 2022, even though the high and rising prices for bonds has been a deal-breaker for me for a long time.

The Democrats' green war on energy has consequences.

Is real war next?