Can Your Bond Portfolio Survive a Trade War!?

Treasuries: From 'I Do' to 'I Don't'?

Okay so I was reading CNBC the other day (yes even I have to deal with grown up stuff sometimes) and this financial futurist guy Dave Nadig was talking about bonds. Bonds! It's like suddenly finding out Mr. Big is into…municipal bonds. Apparently these U.S. tariffs are causing a global trade slowdown. And honey a slowdown is never good whether it's in the economy or…well you know. He said these capital holding requirements are "unwinding". Unwinding! Like my favorite Manolos after a long night? And that all this could mean trouble for bond fund managers. Is nothing sacred?

The Math Isn't Mathing

Nadig who used to run ETF.com was saying that the old rules don’t apply. Remember when everyone thought that if stocks tanked everyone would run to bonds? Like running to your best girls after a disastrous date? Well apparently that’s not happening this time. "The traditional math of things are bad for stocks [and] everybody is going to buy bond just isn't working out this time because the kind of shock we're seeing is one we've never seen before." It's like finding out Aidan Shaw suddenly became a minimalist. Some things just break the mold.

Treasury Note Alert!

And the benchmark 10 year Treasury Note yield? Up to 4.4% on Thursday! And it's up more than 10 percent this week! Last Friday it touched 3.86%. It’s like waking up and realizing your rent just jumped 10 percent. In one week. Even for a rent controlled apartment in Manhattan that's shocking!

Less Trade Less Need?

Apparently the reason countries buy U.S. Treasuries is to finance international trade with the United States. It's like having a really generous sugar daddy… except it’s you know countries. But if trade is slowing down? "When you have less trade you need to finance less trade," he said. Nadig thinks we should expect the holdings of bonds to come down. It’s like deciding you need to cut back on cosmopolitans because your bank account is crying. A necessary evil.

So What Does This All Mean for Your Closet? (and Portfolio)

Okay so maybe I'm not a financial guru (shoes are more my expertise) but it sounds like things are getting a little…complicated. Like trying to navigate dating in your 40s. Maybe it's time to call your financial advisor. Or you know just buy more shoes. At least those will always make you feel good. As I said "I will never be the woman with the perfect hair who can wear white and not spill on it."

Could This Be My Financial Rock Bottom?

So as I sit here typing away I can't help but wonder... is this the financial equivalent of getting dumped via Post it note? Is our faith in bonds over? And if so what are we supposed to do with all this extra cash? Maybe I'll just buy another pair of Manolos. After all a girl's gotta live right? "Maybe our mistakes are what make our fate."