To gain an edge, this is what you need to know today.
Major Macro Arora Call
Please click here for an enlarged chart of 20+ year iShares 20+ Year Treasury Bond ETF (NASDAQ: TLT).
Note the following:
- The chart shows that long bonds fell on Trump’s win in the Supreme Court immunity decision.
- The chart shows that long bonds ran up after falling on the Trump immunity decision. The reason for the run up has been two fold.
- Weak economic data. For details, click here to see prior articles.
- Wall Street almost unanimously calling for investors to extend fixed income duration, leading to investors rushing to buy longer term bonds.
- The chart shows that long bonds are dropping after the assassination attempt on Trump.
- It is worth a reminder that The Arora Report is politically agnostic. We are neither for Trump nor Biden. Our sole job is to stay objective and help investors extract the maximum money out of the markets.
- It is also worth a reminder that investors should separate their politics from investing. For more on this subject, see prior writings from The Arora Report.
- We previously shared with you that the highest probability scenario was Trump winning the Presidency. In The Arora Report analysis, after the assassination attempt, the probability of Trump winning the presidency has gone up significantly.
- Over a long period of time, The Arora Report has made numerous important macro calls that went against Wall Street consensus. The record of The Arora Report's major macro calls is well documented, and to date, they have been 100% correct.
- After the assassination attempt on Trump, there is a new Arora major macro call – reduce the duration of fixed income in your portfolio. This call is contrary to Wall Street’s consensus of increasing portfolio duration.
- The maximum duration in a 60/40 portfolio of bonds is being reduced from seven years to five years. Please scroll down to the “Traditional 60/40 Portfolio” section below for more details.
- We have been sharing with you in the capsules and other posts the changes that are being made now and are likely to be made in the coming months based on the highest probability scenario of Trump being elected as the next ...