A Century of No Return! The Truth About The Beloved Bonds (Brian Jacobs of Aptus Reveals)

About this Video

• Video Title: A Century of No Return! The Truth About The Beloved Bonds (Brian Jacobs of Aptus Reveals)
• Channel: The Meb Faber Show
• Speakers: Meb Faber, Brian Jacobs
• Duration: 00:58:40

Introduction

This episode of The Meb Faber Show features Brian Jacobs of Aptus Capital Advisors. They discuss the historical underperformance of bonds after accounting for inflation and taxes, Aptus's options-oriented ETFs designed to improve returns and mitigate risk, and various investment strategies including trend following and the use of options. The conversation also touches upon the housing market, tax optimization, and critiques of valuation metrics like the CAPE ratio.

Key Takeaways

• Bonds' historical underperformance: After accounting for inflation and taxes, bonds have yielded approximately 0% total return over the past century. This is a surprising revelation for many investors.
• Aptus's ETF strategies: Aptus offers several ETFs employing options strategies to enhance returns and manage risk. These include hedged equity products (ACIO), defined risk alternatives (DRISK), and a minimum volatility strategy with trend following (UPSD).
• Options strategies for risk management and return enhancement: Aptus actively manages options positions, buying puts for downside protection and selling calls to generate income, adapting their strategies based on market volatility.
• The CAPE ratio critique: Brian Jacobs argues the CAPE ratio is unreliable for market valuation due to its use of past earnings, failure to account for buybacks, and inability to capture non-cyclical growth. He prefers using forward P/E ratios.
• Tax optimization and efficient portfolio construction: The conversation emphasizes the importance of tax efficiency in investment strategies, highlighting the tax disadvantages of traditional bond portfolios and suggesting alternative strategies to improve after-tax returns.