Ask The Compound

How Do You Protect Against a Bear Market?

20 snips
Apr 15, 2026
Discussion of whether traditional 60/40 portfolios still shield retirees and how bonds behaved during equity drawdowns. Exploration of fixed-income diversifiers like T-bills, TIPS, corporates, and whether gold can play a similar role. Examination of consumer debt, credit usage, home equity buffers, and who is most vulnerable. Consideration of private alternatives, access, fees, and selection risks.
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ADVICE

Strengthen The Bond Sleeve Not Ditch It

  • Use a diversified bond sleeve inside a 60-40 rather than abandoning bonds altogether.
  • Ben recommends mixing T-Bills, TIPS, corporates and shorter maturities after the 2022 bond drawdown to reduce inflation and rate risk.
INSIGHT

Bonds Historically Cushion Equity Downturns

  • Bonds historically tended to rise when stocks fell, outperforming by roughly 18% in down years on average.
  • Ben shows that across market history there were only four years stocks and 10-year Treasuries both fell, highlighting bonds' shock absorber role.
ADVICE

Use Purposeful Inflation Hedges Not Tiny Tinkerings

  • If you want inflation protection, consider allocating a small, intentional position to inflation hedges rather than token 2% stabs.
  • Ben notes gold behaves more like bonds over 100 years and suggests testing a 60-20-20 style swap with gold for protection.
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