This week, we’re all about BONDS. What does the price of bonds have to do with the price of stocks? Are bonds attractive investments? And what does the FED’s stance on bonds have to do with anything?  

Instead of a game, we kick off this week with Steve D’s news that he’s rearranged the way he thinks about his portfolio. Instead of having a core and satellite model, where some stocks form a solid base with riskier investments layered on top, Steve’s transitioning to a portfolio-and-penalty-box model, where some stocks get the silent treatment for a period of time. What does this mean and which stocks are currently on the sidelines? Steve explains.  

The game is shortly behind, though, and this one is a cracker. Since Paul hasn’t had a chance to play a game by himself (the Steves each did one at the end of October) this week’s game is called Steve, Steve, Steve and Steve, or Not Steve. The Steves offer out a variety of statements and Paul’s job is to figure out whether it applies to Steve D, Steve W, both Steves or neither Steve. Did Steve D once own Citibank? What was Steve W’s first stock investment? Who has more shares in Monzo? Find out by playing along with Paul!  

After a quick pivot into a not-ad (this week our show is not-sponsored by Wise Alpha), it’s into a discussion of bonds. We don’t talk much about bonds. But it’s good to be aware of them and know what the opportunities and the risks that they present are. Steve W explains why he thinks that a certain kind of dividend investor might be well advised to look at bonds as part of their investment strategy and how preferred stocks represent a kind of mid point between common stocks and bonds.   

Sticking with bonds, the next item on our agenda is the FED. Earlier this week, the minutes of the FED meeting from December were released and the markets took a dive. The minutes revealed discussions of decreasing the FEDs balance sheet and raising interest rates in light of the US economy running hot. But what does all this mean? Paul and the Steves talk about hawks, doves, selling bonds, buying bonds, interest rate rises, treasury yields, and the great irrelevance of it all for investors.