March 9, 2021 The yield on the 10-year US Treasury recently touched 1.6%, its highest level since the COVID-19 shutdown. Why are rates rising? 1) economic data is improving, and 2) the market is optimistic about the reopening of the global economy. Are rising rates bad for your portfolio? Our view (which I believe is different from others) is that rising rates should not be bad for your portfolio if you are properly diversified. Meanwhile, market pundits are arguing that it is a doomsday scenario. I think the problem is that many investors have extrapolated previous returns into the future and believe unprofitable technology stocks (i.e., “hopes and dreams” stocks) and bonds will keep going up forever. As my mentor once told me, “everything works until it doesn’t.” So true!