We believe the next big risk is a new kind of bubble: the bond bubble.

Many investors have shifted to bonds and dividend stocks, seeking yield in a low-interest-rate environment. But this search for safety may be creating new risks. Bond prices are elevated, yields are compressed, and duration risk is rising. A small uptick in interest rates could cause significant losses.

At the same time, our model continues to favor high-quality companies with strong balance sheets and consistent earnings. These companies have pricing power and competitive advantages that help them weather economic shifts.

As always, we encourage clients to stay diversified, consider their risk tolerance, and focus on long-term fundamentals — not short-term noise.

Sincerely,

Katz Family Financial