Stress Testing Your Portfolio: Will we add Gold, Treasuries or Nasdaq?

🏆 Vote for The Art of Investing in the FinFluencer Awards! The Art of Investing has been nominated in the Best Economist Influencer category at the FinFluencer Awards. You can cast your vote using the link below: https://www.finfluencer.digital/awards/uk/vote 🏏 The Art of Investing LIVE at Lord’s Cricket Ground If you’ve registered to join us at Lord’s on 13th October, keep an eye on your inbox! 📈 Download the full Portfolio Performance Slides View the portfolio breakdown: https://drive.google.com/file/d/1d6dPUTic97zGZKknlxiTlAApTcF5DS3B/view?usp=drive_link 📧 Get in touch: [email protected] 📱 Behind the scenes: @_theartofinvesting on TikTok This week on The Art of Investing, it’s time for the big end-of-quarter portfolio review. With bond yields continuing to rise and markets becoming increasingly divided beneath the surface, Rich, Mark and Chris ask whether the investment environment is beginning to fundamentally change, and what that could mean for the portfolio over the final three months of the year. CJ sets out three possible scenarios for markets: a continued surge in bond yields that ultimately leads towards recession; an AI-driven productivity boom that brings greater disinflationary pressure; or a continuation of the volatile environment investors are navigating today. The team debate which scenario they think is most likely, whether it’s finally getting close to the time to buy longer-dated bonds, and whether AI can continue driving markets even as the cost of capital rises. And after another difficult week for India, the investment committee finally loses patience, selling the position completely and reallocating the capital into the Nasdaq 100 and gold. This Week’s Highlights: 📉 Are Bond Markets Reaching Breaking Point? Bond yields continue to climb, forcing the team to ask how far they can rise before equity markets and the wider economy begin to feel the pressure. 🐻 Three Scenarios for the Next Three Months CJ lays out three potential paths for markets: rising yields eventually triggering a recession, AI creating a powerful disinflationary environment, or markets continuing to grind through the current volatility. 🤖 Can AI Keep Defying Higher Rates? Strong results from Micron reignite the AI debate. Mark argues that productivity gains could arrive faster than expected, while the team questions how long technology companies can remain insulated from higher borrowing costs. 💰 Is It Finally Time to Buy Bonds? With long-dated yields moving higher, the team debates whether bonds are becoming attractive again – or whether investors could get an even better opportunity by waiting. 🥇 Gold Comes Back Into the Portfolio After discussing gold for several weeks, the investment committee finally takes the plunge, adding a new allocation as part of its end-of-quarter portfolio changes. 🇮🇳 The Team Calls Time on India India has been one of the portfolio’s most difficult positions. With the holding down again this week and remaining negative since inception, the team debates its outlook before deciding to exit completely. Portfolio Snapshot - Week 59: 📊 Weekly portfolio performance: -0.5% 📈 Total return since inception: +25.0% 📅 2026 year-to-date return: +12.5% Top Performers: 📈 iShares Nikkei 225 ETF: +3.0% 📈 Vanguard FTSE 250: +0.6% 📈 Invesco EQQQ Nasdaq 100 UCITS ETF: +0.3% Underperformers: 📉 iShares MSCI India ETF: -3.8% 📉 BlackRock World Mining Trust PLC: -3.1% 📉 WisdomTree Copper ETF: -2.3% Portfolio Changes: The investment committee decides to sell the portfolio’s entire 5% India position after another difficult week for the holding. The proceeds are split between two areas: 📈 +2.5% Nasdaq 100 - increasing the allocation from 2.5% to 5%. 🥇 +2.5% Gold - introducing a new direct gold allocation to the portfolio. Big Questions This Week: - How high can bond yields go before something breaks? - Is the global economy moving towards recession or another period of strong growth? - Could AI become a major disinflationary force? - Can technology stocks continue performing as borrowing costs rise? - Is it finally time to start buying longer-dated bonds? - What happens if unemployment begins to rise? - Has India become too difficult to justify in the portfolio? - Is gold becoming more attractive as uncertainty increases? - Where should investors be positioned heading into the final quarter of the year? Disclaimer: This podcast is provided for educational and informational purposes only. The content presented is not intended as personal investment advice or a recommendation to buy, sell, or hold any particular securities or investments. All discussions regarding the model portfolio are illustrative and for educational purposes. Your capital is at risk. The value of shares, ETFs and ETCs can fall as well as rise, which could mean getting back less than you originally put in.