Those are equity, bond and money market funds I track, as at last Monday.
Mortgage rates appear to have jumped.
However, let’s have a look at the next chart.
Rates are only just getting back to their 2003-2008 level, a time when people were hardly holding back on real estate.
So what do I think:
1// Assets could get cheaper – I don’t see any case for a melt up.
2// If the Fed materially shrinks their balance sheet then assets will get a lot cheaper. Cutting their balance sheet in half takes us back to 2015.
3// Sit down and ask yourself “what if” asset prices drop to 2015 levels, a 50% reduction. Odds are, you have your interest rates locked in. So the main risk will be short term cash flow due to unemployment. How might you protect yourself?
4// Having a year’s core cost of living in an “emergency” fund makes sense. Personally, I didn’t reinvest the proceeds from a Q2 asset sale. My reserve is enough to navigate a nasty recession without selling anything further.
So a “prudent cash reserve” is King.
I don’t think it makes sense to liquidate positions, and pay extra taxes, because risk assets might fall in value.
One of my favorite follows (Elias Lohtonen) was writing about the differences between Beginners and Elites. The context was metabolic fitness, as determined in his lab.
This got me thinking about my journey as a new athlete.
When I started out, I disliked intense training:
It crushed me
I wasn’t very good at it
However, I thought I “needed it.”
Turns out I was lucky I didn’t bother with it for many years.
We now have a better idea why.
I’ll take you back 25 years.
Lactate As A Fuel Source, Not Waste Product
When I learned exercise physiology in the 1990s, lactic acid was presented as the athlete’s enemy – causing pain and slowing us down.
Difficult, searing training was believed necessary to teach our bodies to buffer and tolerate this acidic compound.
We used to think lactate would form crystals in our muscles, causing post-exercise muscle soreness. Hours, and days, later we would “flush the legs” to remove these waste products. We’d get massages to “break up the lactate.”
Turns out we were wrong.
Lactate is essential, and extremely useful, once we’ve trained our bodies to use it.
Lactate is also a key regulator of intermediary metabolism, regulating substrate utilization. It decreases and inhibits the breakdown of fat for energy purposes (lipolysis), as well as the rate of glucose utilization by cells (glucolysis).
The bold part is mine.
What does this mean for you?
Athletes who start fast, and perform “intense” endurance training impair their ability to burn fat
Every human I’ve ever met (!) wanted to burn more fat.
You already have plenty of capacity to generate lactate. If you want to improve performance (and burn more fat) then you need to focus primarily on the low-end.
2// Next up, Dr. San Millán’s paper on Metabolic Flexibility is a fascinating read on the differences between three groups: elite athletes, recreational athletes and individuals with metabolic syndrome.
3// Overcoming our shared bias towards intensity : One of the way’s to retrain your mind is to focus on submax performance. At 53, I’m very interested in my paces, and powers, at 130 bpm. This is ~35 beats below max (the “top of”cap” in the table below, approximately).