Ep 83 | Why the Bond Market Decides the Cost of Money

Ask a question or send feedbackApollo Lupescu from Dimensional Fund Advisors joins Aden Wilkins and David Andrew to unpack the questions clients keep raising, from the size of US government debt to what is really happening in the bond market. Apollo makes the complex simple and explains why the headline debt number matters far less than most people think.If you enjoyed this episode, make sure to comment, like and subscribe to never miss an episode!In today's episode: Why US government debt has grown to around 40 trillion and why the growth rate looks similar under both parties.The metric that actually matters, which is the cost of paying interest on the debt relative to the size of the economy.How bonds work in plain English and why maturity and credit quality drive the interest rate a borrower has to pay.Why the bond market is the ballast in a portfolio and how it underpins the cost of money across the whole system.A simple framework for every investment choice, sorted into ownership, lending and non economic activity.The real risks in private credit and private equity and the question to ask before chasing higher returns.------------------------------------------------------------------Follow David Andrew:LinkedIn: https://www.linkedin.com/in/davidandrewfamilywealthadviser/Capital Partners: https://capital-partners.com.au/team-members/david-andrew/Follow Aden Wilkins:LinkedIn: https://www.linkedin.com/in/aden-wilkins-40b006105/Capital Partners: https://capital-partners.com.au/team-members/aden-wilkins/Follow Capital Partners on socials:Facebook: https://www.facebook.com/CapitalPartnersPWA/LinkedIn: https://www.linkedin.com/company/capital-partners-3/Instagram: https://www.instagram.com/capitalpartnersprivatewealth/------------------------------------------------------------------Chapters:(0:00) Welcome and Wins of the Week(4:30) The Questions Clients Keep Asking(7:11) Inflation, AI and the Anxiety of Bad News(11:32) How US Debt Reached 40 Trillion(14:02) Why the Debt Is So Hard to Cut(16:11) The Number That Actually Matters(21:00) Why the Bond Market Underpins Everything(24:47) Maturity and Credit Quality Explained(31:53) What Greece in 2008 Teaches Us(36:08) Private Credit and Private Equity Demystified(39:57) Ownership, Lending and Non Economic Activity(47:04) How Capital Partners Builds Portfolios------------------------------------------------------------------The Purposeful Investor Podcast is a public service provided for Australian investors wanting to make smart decisions with their money, avoid costly mistakes, look after the people they care about, and, have a great life!We draw on over 30 years of experience from David Andrew and the Capital Partners team.For more information on Capital Partners' award winning team, visit capital-partners.com.au. Have a question? Email us [email protected] episode provides general advice only. We do not consider your personal circumstances when we share this information. Always refer to your financial adviser for advice about your personal circumstances. Capital Partners Consulting Pty Ltd AFSL 227148 trading as Capital Partners Private Wealth Advisers ABN 27 086 670 788.