Thoughtful Money · Oct 3, 2026 · 1h 12m · 55m saved
With Lance Roberts, Chief Investment Strategist at RIA Advisors
The 10-year Treasury yield is now three standard deviations above its four-year moving average, Lance Roberts said, and each of the roughly five times that has happened since 1994 was followed by a fall in yields.
Much of the commentary on bonds this year has been about losses and the risk of default. Roberts's firm is going the other way: next week it plans to sell a 30-year bond position at a loss and put the money into more 20-year and 5-year bonds.
"First of all, with yields at 5%, this is a gift. And we want to take advantage of that gift because you're not going to keep that for very long." — Lance Roberts
Lance Roberts, Chief Investment Strategist at RIA Advisors, on Thoughtful Money, has managed portfolios for more than 35 years, through the 1987, 1999, 2008 and 2020 cycles, and has joined the show's weekly market recap for close to five years by his own estimate. In this interview he walked through his bond trades, the jobs data and his fourth-quarter outlook.
The full interview is covered here so you can skip it. 1 hour 12 minutes of audio, 17 minutes of reading.
Here are the 16 calls that matter.
Key Takeaways
RIA is selling its 30-year bond position at a loss and buying 20-year and 5-year bonds, with 5-year bonds paying 5%
The 10-year is three standard deviations above its four-year average, a level that has preceded falling yields since 1994
Roberts says only megacap tech is holding the S&P 500 up; small caps, midcaps, utilities and real estate have been "beaten to death"
The largest companies refinanced in 2020 with the 10-year near half a percent, so higher rates barely touch their earnings
Bond income now covers more than half of a 6% return target, against 29% during the near-zero-rate years
He expects the market's next move to be higher through year end, led by the sectors that have fallen furthest
Bond funds and bond ETFs are bets on the direction of rates, he said, because they never mature at face value
The Fed should not have hiked into an oil price spike, he said, after revisions pulled down the PCE inflation readings
Companies are hoarding labor: almost nobody is hiring and almost nobody is firing, as in 2009 to 2011
1. Fiscal Discipline Since 1985
The host opened from Fresno, California, where he had spent the previous evening at a private event with Thomas Hoenig, who ran the Kansas City Federal Reserve, sat on the Fed's rate-setting committee in the Bernanke years alongside Kevin Warsh, now the Fed chair, and was a director of the FDIC. Hoenig is now at the Mercatus Center. The host said Hoenig's view turns on whether Washington finds any fiscal discipline, and that he sees the Fed's job as telling Congress it will no longer monetize its debt. He added that Hoenig thinks highly of Warsh and Treasury Secretary Scott Bessent.
Roberts said calls for fiscal discipline are perennial and never answered
"And what's funny about that is they were having that same conversation in 1985." — Lance Roberts
Roberts said there is too much money in politics for discipline to happen, and pointed to Greece, where austerity almost destroyed the country. Much of the economy's growth comes from government spending, he said. The Fed can do nothing about oil prices or data center spending; what it can do is raise borrowing costs for consumers, which cures inflation by crushing demand and pushing the economy toward recession. The host said Hoenig had warned that a fiscal tightening done too fast would send the economy into cardiac arrest.
Asked where the current path ends, a sovereign debt crisis or a currency so debased that the public revolts, Roberts said the second is possible and the first probably is not while the dollar remains the reserve currency. He added that the debt-to-GDP ratio is improving because economic growth is strong.
