[Macroeconomic Survival Epilogue] Asking Again What My Investing Is For
I am not a bond expert.
I am not an economist who studies interest rates or a fund manager who has spent a career trading bonds. I am an ordinary individual investor who began studying bonds because an equity-only portfolio made me uneasy.
At first, I thought understanding bonds would make my account a little more stable. They might buy time during difficult equity markets and eventually provide regular cash flow after I left my job.
That expectation began this series.
As I write the final essay, however, what remains in front of me is not a stable portfolio. It is a collection of different bond funds, a substantial loss, and a written record of what I misunderstood.
This epilogue is not an attempt to dress that failure in a more flattering meaning.
It is an attempt to call a failed investment a failure, then ask what I still do not want to lose because of it.
1. The Loss Continued After the First Draft
My long-duration bond investment was already at a loss when I wrote the first draft of this essay.
I still believed time might improve the outcome. Once the Federal Reserve began cutting rates, I expected long-term yields to decline gradually and bond prices to recover. The loss was large, but I regarded it as an investment whose result had not yet arrived.
By October 2026, I could no longer leave that sentence unchanged.
On October 7, the yield on the 20-year US Treasury was 5.71%, and the 30-year yield was 5.67%. Both had moved well beyond the 5% level I had treated as a psychological boundary. Long-bond prices fell further even though I had expected long-term yields to follow the policy rate downward.
The yen did not move in the direction I had been waiting for either. On the same day, the dollar traded around 158 yen. I had expected the yen to strengthen as the policy paths of the United States and Japan converged. Instead, yen weakness continued, increasing the loss on the yen-exposed long-bond strategy.
The situation was clearly worse than when I wrote the draft.
It is difficult now to describe the position only as a process awaiting its outcome. As of October 2026, my long-duration bond investment stands as a failure.
It took me longer than I expected to write that sentence plainly.
2. Explaining the Market and Explaining My Choices
There are many ways to explain the rise in long-term yields.
Inflation remained persistent. Concerns grew about US fiscal deficits and Treasury supply. Policy rates and long-term yields were free to move differently, while the term premium demanded by investors for holding long maturities changed. The yen was never determined by the policy rates of two countries alone.
Those explanations help me understand the market.
They do not fully explain my loss.
The fact that markets moved differently from my expectation is separate from the fact that the outcome became this large in my account. I could not choose the direction of the market. I did choose which products to buy and how much of them to hold.
Looking back, the cause of the failure lies closer to my decisions than to the complexity of the market.
I labeled bonds safe before I understood them. Because I considered them safe, I accepted long maturity, leverage, and currency risk in bonds more readily than I would have in stocks.
I failed to distinguish between the creditworthiness of a government bond and the price stability of an ETF holding that bond. I understood only later the difference between an individual bond held to maturity and an ETF that continuously maintains long duration.
What I did not understand was not limited to bonds.
I also did not understand enough about the way I become confident while still learning.
3. The Number of Products Kept Growing in the Name of Learning
Because I did not know bonds well, I decided to study them.
There was nothing wrong with that decision by itself. The problem was that each new concept I learned came with a product I wanted to buy.
BND and LQD introduced me to aggregate bonds and corporate credit. I bought a Korean 30-year government bond fund because I expected slower growth in Korea. When rates rose, I moved into SGOV, Korean CD-rate ETFs, cash management accounts, and money market funds. When rate cuts appeared closer, I bought TLT and EDV. Studying persistent inflation led me to add LTPZ. Wanting to recover the time spent waiting led me to TMF. Finally, I combined US long bonds and yen exposure in one fund.
Each purchase had an explanation.
Those explanations did not come from one consistent principle. I moved from one product to another as the market's most persuasive story changed, then read more material in order to understand what I had already bought.
I called it learning by investing.
In hindsight, the order of learning and buying was often reversed. I did not buy because I understood the product. I tried to understand it after I owned it. Sometimes new knowledge did not change my decision; it merely provided another reason for a decision already made.
The products became more diverse, but their roles in the portfolio did not become clearer.
Cash reserves, equity hedges, positions seeking gains from lower rates, and assets intended to create retirement income became mixed together. Without distinct roles, it was difficult to determine an appropriate size for any of them.
Understanding a complex product is not the same as having an investment principle.
That distinction may be what remains with me longest from writing this series.
4. Where My Equity Gains Disappeared
Writing down the size of the loss is still uncomfortable.
I spent years making mistakes in stocks. I moved from individual stock selection to ETFs, diversification, factors, and asset allocation. Over time, I also developed rules intended to keep emotion from deciding when I bought and sold.
When that work began to produce gains, I thought bonds would help protect them.
The opposite happened.
The losses in bonds erased most of the gains I had earned in stocks.
The reduction in wealth was painful. What remains more difficult is that the outcome ran against the reason I had owned bonds. I wanted an asset that would help me wait through a bad equity market. Instead, I also tried to use it to earn a larger return.
I wanted safety and chose the longest duration. I wanted time and bought a leveraged fund that reset its exposure every day. I wanted simple cash flow and constructed a portfolio that required me to judge rates, inflation, and currencies together.
Bonds did reduce my equity gains. More precisely, my decision to assign too many jobs to bonds reduced them.
I need to preserve that distinction if I am to avoid repeating the same mistake through a different product.
5. A Few Principles to Keep After Failure
Admitting failure did not make the next decision immediately clear.
I still had to distinguish patience from a reluctance to realize a loss, and a thoughtful revision from an emotional exit. I had to decide whether the problem was bonds themselves or the way I had used them.
I have not found every answer.
The questions I want to ask before buying another bond product are, however, a little clearer than before.
- I will first write down whether the asset is meant for cash preservation, volatility reduction, or future income.
- I will think about a tolerable position size before the expected return.
- I will ask whether the asset can still perform its intended role if my rate and currency forecasts are wrong.
- I will not buy in order to learn. I will buy only if the product is still necessary after I understand it.
- If a simpler product can meet the same purpose, I will choose the simpler one.
None of these ideas is a new investment technique.
They are questions I should have asked before investing. It took several losses before I learned to place them ahead of the product.
6. A Paycheck for My Future Self
At the beginning of this series, my reason for studying bonds was modest.
I wanted to remain in the market after the paycheck from my employer stopped. I hoped public and private pensions would establish a floor under my living expenses, while cash from investments could support part of my life and allow me to continue investing.
I wanted my present self to send a monthly paycheck to my future self.
That purpose has not changed.
What has changed is how I think I can reach it. I once believed that identifying the peak in rates and buying duration early could build future income more quickly. Now I think the goal is closer to making tolerable decisions and repeating them for a long time than to making one large forecast correctly.
A future paycheck will probably not be an account that suddenly becomes complete.
It will be the result of money set aside each month, the interest that money earns, and the time allowed to accumulate through patient reinvestment. Even if progress is slower than I hoped, the process must be one I can continue without disrupting my life.
That is why I still have hope.
The hope does not come from expecting long-term yields to fall soon or the yen to rebound. It comes from knowing that I can ask a different question before the next purchase—and that I still have time to repeat that question.
7. The Course I Want to Keep
I once understood “Stay the Course” as holding the product I had chosen until the end.
I confused patience with an unwillingness to admit a loss. I treated a change in my original judgment as a departure from principle.
I now understand the phrase differently.
The thing to preserve is not the product. It is the purpose.
TLT, EDV, LTPZ, TMF, and the yen were never the purpose of my investing. They were tools I chose at particular moments. If a tool does not serve the purpose, I should be willing to examine it and change it.
The wish to send a paycheck to my future self is different. I still want a structure that allows me to avoid hurriedly selling stocks to fund my life during a bad market and to continue investing after retirement.
Finishing this series does not end my questions about bonds.
The present loss will not recover immediately, and my future decisions may be wrong again. But if I record the failure as a result of my own choices rather than attributing it only to the market, I may reduce the chance of repeating the same risk for the same reason.
There is little in investing that I can control.
I cannot decide the direction of yields or the timing of exchange rates. I can decide what I am investing for, whether to avoid a product I do not understand, and whether to keep the position within a size I can bear.
Perhaps the course I need to stay is made of those decisions.
Only after losing most of my equity gains in bonds did I return to the question with which I began.
What kind of time does this investment leave for my future self?
From now on, I want to see that question before I see the name of the bond product currently in favor. I will not erase the failure. I will use it as the ground on which I slowly prepare the next paycheck.
That is what Stay the Course means to me now.
End of the Macroeconomic Survival series.
Sources Consulted
- US Treasury: Daily Treasury Rates for October 2026
- Bank of Japan: Foreign Exchange Rates, October 7, 2026
🌊 [Macroeconomic Survival Series]
- Prologue: The Asset I Trusted Most Was the One I Understood Least
- Chapter 1: I Expected Slower Growth in Korea, but the Market Moved on a Different Clock
- Chapter 2: Only After Retreating to Cash Did I Learn the Value of Waiting
- Chapter 3: I Extended Duration While Waiting for the Peak in Rates
- Chapter 4: Preparing for Inflation Added More Risk
- Chapter 5: I Tried to Forecast Rates and Currencies Together
- Epilogue: Asking Again What My Investing Is ForCurrent