Stagflation Risk: Why 60/40 Failed in 2022, Bond Volatility, and Hedging for What’s Next

The episode discusses stagflation and whether a repeat of 2022—when both stocks and bonds fell—could happen again, and what that means for traditional 60/40 portfolios. Leibel explains how rising Fed interest rates mechanically push bond prices down, why many bond funds were “stuck” by their prospectus and couldn’t move to cash, and how bonds became as volatile as stocks in 2022. He argues today’s rate moves may not create the same magnitude of losses, but warns that investors “chasing yield” can still be hurt if rates rise further. On stagflation, he notes stocks can reprice for inflation, but highlights added risk from an AI-driven market concentrated in a handful of companies and fueled by non-cash promises and cross-investment, which could unwind if stagflation persists. He emphasizes a multi-bucket, hedged approach to balance uncertainty.