Thoughtful Money · Oct 10, 2026 · 97m · 85m saved
With Lance Roberts, Portfolio Manager/CIO, RIA Advisors
RIA Advisors bought 5-year Treasury notes yielding 5% for its clients last week, at a time when Lance Roberts expects stocks to return between minus 2% and 2% a year after inflation over the next decade.
Many investors have avoided bonds this year because they expect yields to keep rising and prices to keep falling. Roberts said that view looks at the wrong number.
"And there's too much focus set on the level of rates rather than the actual function of bonds in a portfolio." — Lance Roberts
Roberts, Portfolio Manager and Chief Investment Officer at RIA Advisors, has just rebalanced the firm's client portfolios for the fourth quarter, trimming tech winners and adding bank, insurance and utility stocks. He said the firm moved a large share of its stock exposure into Treasury bonds in June 2008, three months before Lehman Brothers collapsed, and it now buys bonds in blocks of $20 million to $30 million.
The full interview is covered here so you can skip it. 97 minutes of audio, 12 minutes of reading.
Here are the 10 calls that matter.
Key Takeaways
RIA Advisors rebalanced from growth to value for the fourth quarter
It took profits in AMD and Nvidia and bought Berkshire Hathaway, JPMorgan, Goldman Sachs and utilities
The S&P 500 has averaged a 6.6% fourth-quarter gain in midterm election years
16 of the last 19 midterm years were positive
A Democratic Congress with a Republican president has produced the weakest market returns of any combination
The 10-year Treasury yield sits at 5.3% because of growth and inflation, not debt and deficits, Roberts said
He called yields of 7% to 9% far-fetched, because rates that high would wreck the economy
Bonds can now supply 53% of the return an investor needs to reach a goal, against about 12% three years ago
Investors who need their principal back should own individual bonds, not bond ETFs, he said
A 10-year yield 3 standard deviations above its monthly moving average has marked the peak in rates
Credit spreads are widening only on the lowest-rated junk bonds
For municipal bonds, only the tax-equivalent yield matters, and the extra pay is too thin today
1. Growth to Value
RIA Advisors finished a full rebalance of its portfolios for the fourth quarter. It restructured both its bond and stock holdings and moved money from growth stocks to value stocks.
Roberts said the most overbought parts of the market, where prices have run furthest ahead of their recent averages, have cooled in the past week. Those include megacap growth stocks, semiconductors and the speculative technology stocks held by ARK Invest's funds. Small-cap value stocks, developed international markets and other laggards have started to recover.
A drop in oil prices is the trigger he expects for a rotation into rate-sensitive sectors
Financials, real estate and industrials sit far below their long-term averages relative to the market, he said. That usually sets up at least a short-term rally into year-end.
"If we get oil prices back down at the $80 range, we should see a decent rotation into some of those more interest rate sensitive sectors, REITs, utilities." — Lance Roberts
He described it as a trade, not a long-term holding.
The market-cap-weighted S&P 500, the version quoted on the news, set an all-time high on Tuesday. Leaving out four strong days, Roberts said, the index would be flat for six months.
The equal-weight S&P 500, which holds every company in the same amount, tells a different story. Its gap with the main index triggered a buy signal in RIA's models, which is why the firm started rotating. Financials, industrials and utilities have begun to turn up after a one-month spike in interest rates sold them off.
