news.theideafarm.com - Bonds rule everything

If you click the top link here,

Look at slides 11 & 15

"What average yield should you use in the UK? Over the long-run (since 1711- and since
1900-) the median is around one percentage point less than the average which is
heavily influenced by 1960-1997 where 10yr yields were permanently above 5.5%.
Outside of that period the current yield is at the top end of the historical range."

Eyeballing the UK chart, you can see most of the last 300 years were below the current level.

And there's only one period where it was meaningfully above for any length of time, which began off a much higher base, the long post-ww2 decline.

---

Slide 19 is also interesting

"Interestingly, while most global yields hit multi-decade highs,
Swiss and China yields have been flat or moving lower..."

---

Slide 23, TRS view: sure looks like inflation at 3% is a choice, not an accident.

---

If you're interested in REITs, 3% average inflation is a pretty nice level if you have long term contracts locked in with inflation cap/collar at 2/4%.

It's less nice if you locked in long term escalating contracts at a fixed 1-2% per year.

The follow numbers should all be double checked before relying on them, this is mostly from memory + follow up check with AI:

O Realty Income - I think has some fixed 1-2% increases, 10-15 year leases?

ADC Agree Realty - has some fixed 1-2%, 10 year leases?

BNL Broadstone - 2-2.5%, 15 year leases?

EPRT Essential - 1.5-2.5, 15 year leases?

In 3% inflation world, fixed increase leases <3% will underperform for a decade or more before they start to catch up.

TRS