It’s been five years since the United States was stripped of its AAA credit rating by Standard and Poors.  Reports of the downgrade were filled with an array of worst case scenarios. There was worry that this would push up borrowing costs.  The 10-year was at 2.33% in 2011.  It is 1.56% today. There was worry that foreign debt buyers would sell US debt en mass.  Instead, we’ve seen a flight to safety as the world continues to snap up US Treasury securities.  At 1.5%-ish, our 10-year is one of the highest yielding government securities as Germany, Japan, and Switzerland flirt with negative rates. The ten year Treasury is a financial standard, often used as the basis for a hypothetical risk-free rate in financial models.  Downgrading the foundation of these models was a very big deal.  However, the S&P 500 is up over 100% since the downgrade, including dividends.  Think about that…

My last post was about uncertainty and volatility and how even in a low vol environment like today, marketers will magnify feelings of uncertainty to sell the product of the month.  Regardless of the statistical fact that volatility is historically low, we as humans seem to be as pessimistic as ever about the future. It is not uncommon to feel reluctance to implement a financial plan due to fears about what’s happening in the world right now.  It is easier to say we’ll wait until the world is less scary before putting money to work.  So when was the world less scary?  30 years ago when the threat of nuclear war was a legitimate concern?  20 years ago when the internet was certain to destroy brick and mortar stores?  10 years ago when the Middle East was in turmoil (ok, turmoil is the only constant in that region)?  There has…