For the decade that preceded 2022, the acronym TINA (There Is No Alternative) applied well to stocks . As central banks used every excuse to flood the system with liquidity, yields were driven to zero, and it seemed that the only way to get any return was to buy stocks. Investors gorged on index funds, and passive ETFs overtook actively managed investments.
Alas, as central banks realized that inflation, long thought dead, was a real problem, and raised interest rates aggressively, yield curves inverted to historic levels, making short duration Treasury Bills the only safe, viable investment alternative, leading to “TINAC” (There Is No Alternative To Cash). But inverted yield curves are not a stable healthy state of affairs for economies, and as expected, have eventually resulted in financial market breakage which we have been observing for the last two weeks and especially this weekend as Credit Suisse, once my employer, has all but ceased to exist.
The full note on this important topic can be downloaded at this link: LTA Thinking – GITA Gold Is The Alternative