Ask The Compound · Sep 30, 2026 · 40m · 31m saved
With Jonathan Novy, insurance expert at Ritholtz Wealth Management
Since 1950, the S&P 500 has fallen into a bear market roughly once every seven years — and on this episode, Ben Carlson put the odds of the next one at 55/45 within 24 months, not because he's sure, but because the show's whole method is refusing to be sure.
Most market shows pick a side and defend it. Ask The Compound instead ran five separate questions from its audience — on rates, insurance, wages and 0% financing — and answered each one with the data rather than a prediction.
"It almost feels too obvious to say that a slowdown in hyperscaler spending would lead to a stock market sell-off in a minor recession." — Ben Carlson
Carlson has written about market history since the early 2010s and co-manages billions as a portfolio manager at Ritholtz Wealth Management; his data on rate cycles goes back to 1950. Jonathan Novy, the show's insurance expert, works through two separate audience questions on when permanent life insurance and long-term care coverage are actually worth buying.
The full episode is covered here so you can skip it. 40 minutes of audio, 9 minutes of reading.
Here are the 6 takeaways that matter.
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Key Takeaways
Rates have jumped but stocks haven't blinked
The 10-year Treasury yield went from 4.6% to 5.3% in the past month alone, while the S&P kept rising
Permanent life insurance has real, narrow uses beyond the "investment vehicle" pitch Novy says gives it a bad name
Estate liquidity, equalizing an inheritance, and insuring a defined-benefit pension with no survivor option
Long-term care insurance has a catch-22: the people who can afford it can often afford to self-insure instead
Wages have actually kept pace with inflation since 2018 — sentiment hasn't caught up
Carlson puts 55/45 odds on a recession within 24 months, with an AI-spending pullback as the likeliest trigger
0% APR financing is worth taking if you'll actually pay it off — and if the "0%" doesn't hide a 3-5% fee
1. Rates Rise, Stocks Shrug
A viewer named Brian asked why the stock market looks calm — the VIX is actually declining — while the 10-year Treasury yield has been "screaming higher."
The 10-year Treasury yield has gone from 4.6% to 5.3% in the past month alone, and from under 4% as of early March.
"It does seem odd that interest rates are screaming higher, but the stock market is doing just fine, right?" — Ben Carlson
Carlson said textbook finance says higher rates should mean lower present values for stocks — but history doesn't cooperate. He looked at every instance since 1950 of the 10-year yield rising by 1 percentage point or more: 14 instances, and the S&P 500 was positive in 12 of them, with an average gain of roughly 35%. The two exceptions were minor declines — until 2022, when rates rose on 9% inflation and stocks fell 25%.
This year, S&P 500 earnings are up roughly 25% even as price-to-earnings multiples have contracted by double digits — so the market itself, Carlson argued, is already pricing in higher rates by paying less per dollar of profit, even as profit growth more than offsets it.
Research from Brian Belski's team found the S&P has historically done better, not worse, during rising-rate periods — an average 14% gain when rates rise versus 7% when they fall, because rates usually rise when the economy is strong and fall when the Fed is cutting into weakness.
"I think what we can say is that interest rates hasn't had an impact on the market yet, but it's had an impact on valuation." — Ben Carlson
