Essay 1 of my five-part series: Is this 36-year trend over?

Dear Reader,

As promised, here is the first installment in the five-part series I’ve put together on five individuals who have been influential in shaping my worldview.

I wanted to start this series with a BIG idea that is especially relevant in today’s world. I could think of none bigger than “bond king” Jeffrey Gundlach’s call that the secular bond bull market is over.

Anyone who started investing after 1981 has never experienced a bear market in Treasuries. But with short-end Treasury yields now at their highest levels since 2008, and the 10-year yield threatening to break out of its long-term trend channel, could this be the end for the bond bull market?

Where yields go from here will affect all asset prices and change how we invest. I believe this is the single most important trend investors need to pay attention to. That’s why the insights I’ve learned from Jeffrey Gundlach are too important not to share with you.

It took a few weeks to put this five-part series together, and I want to know what you think of each installment and the “big ideas” I cover in them.

I have included an excerpt from the Jeffrey Gundlach article, below. When you click to read the full article, you can share your thoughts and feedback at the bottom of that page. I’m very excited to see what you think.

John Mauldin

The Moment of Truth for the Secular Bond
Bull Market Has Arrived

The secular decline in bond yields is one of the most definable trends in financial markets, and also one of the most important. As you know, US Treasury yields are the bellwether for global interest rates. Almost every market and asset class in the world is affected by them.

At every opportunity, I like to point out that interest rates are the cost of money. Unfortunately, at 68, I’m old enough to remember when the cost of money was high.

In the early 1980s, I took out a business loan with an 18% interest rate. The repayments were no fun, but I was one of the lucky ones who could actually afford to borrow money at that time.

In the 36 years since then, the cost of money has fallen sharply—and demand for it has skyrocketed. The US economy has become heavily reliant on easy money, which leads to the question, “What would happen if interest rates increased substantially?” One famed investor who has explored this question is “Bond King” Jeffrey Gundlach.