Fellow investors,
Equities grew again in the 3rd quarter, despite an awful quarter for bonds:
The Cost of Money
Money is now a lot more expensive. 10 year interest rates jumped from 4.5% to 5.3%. This little jump drove $1+ trillion of markdowns to bond principal. A combination of growing geopolitical instability, somewhat loose monetary policy, and persistent federal deficits are driving long term interest rates higher.
Meanwhile, some of the most historically money dependent companies - OpenAI and Anthropic - continue hunting for more cash. Anthropic’s public offering has slid into November, while OpenAI punted theirs to 2027. Any time the cost of borrowing rises like this, families, like companies, begin hunting for ways to reduce their liabilities.
Your Family CFO
We’re 3 years into building a modern private wealth company. We’ve consolidated our planning and investment insights into this weekly release. Recent highlights:
So, Who Can You Trust?
The US Federal Government, the most reliable borrower in the history of the world, is currently paying 5.28% annualized on 7-year treasuries. That’s the highest rate seen in 19 years. If, for example, you invest $100,000 in 7-year treasury in your retirement account, set the dividends to automatically reinvest, you’d see $143,358 in seven years. How many of your current investments can guarantee that type of outcome?
We are in a moment during which investors are allocating enormous capital to AI development. But the hurdle rate for justifying those investments is higher than ever.
Social Impact
Expanding access to education is the best tool we’re aware of to fight against the perpetual widening of economic inequality. This quarter, we again supported Khan Academy.
Robert
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Upholdings is a registered investment adviser in applicable jurisdictions. Registration does not imply any specific level of skill or training. This newsletter is provided for informational and educational purposes only and does not constitute investment, tax, legal, or accounting advice. It is not an offer or solicitation to buy or sell any securities or investment strategies. Past performance is not indicative of future results. Investing involves risk, including the potential loss of principal.